What All Financial Advisors Should Do (but Don’t): Build an Investment Plan to Match Your Goals
Do your investment decisions revolve around your goals? If you have a financial advisor, they should. Your financial advisor should create and manage a portfolio to help achieve your goals.
But when we say “goals,” what do we mean? A lot of investors speak about index benchmarks and other shop talk. But when we say goals, we mean your life goals. A good retirement, for instance. Or a vacation home for the family. A yearlong sabbatical. College educations for your children and grandchildren.
We make it our mission to achieve our clients’ life goals. And all the investment, financial, and tax recommendations are meant to succeed in that mission.
Not every financial advisor does this, though. To help you determine what your advisor should do for you, here is how we would build and maintain your investment portfolio if you worked with us:
Assess your goals: We start by understanding what you desire in life—what you want to achieve that requires money. Since your financial plan (including your investment portfolio) is personalized to you, this first step of goals discovery is crucial.
Establish investment objectives and account types: With your goals as the foundation, we establish the framework—i.e., your investment objectives. We research and advise on the best investment strategies and accounts to help achieve your various goals.
For instance, if you want to help your grandchildren pay for college, we recommend the account type, such as a 529 savings plan, when to set the account up, and how much to contribute to help achieve the desired balance.
Plan asset allocation: We advise on the assets your accounts should contain to achieve your goals. We incorporate needs such as your time horizon, risk tolerance, and tax opportunities and liabilities to help determine the right proportion of equities to fixed income.
We diversify your asset allocation so that you are not exposed to too much risk in one area and are well-positioned to achieve the long-term returns you seek.
Build and maintain your customized portfolio: We create personalized portfolios for each client because everyone has unique goals. But with all clients, we remain vigilant about costs, seeking to reduce expenses and taxes.
As a Registered Investment Advisor, our Greenwood Village, CO financial planning firm also maintains fiduciary care so that you know our advice puts your interests first.
Regular rebalancing schedule: We monitor your investment portfolio to help ensure that it maintains the proper asset allocation throughout various market movements and economic conditions. We do this while managing the portfolio’s tax efficiency and risk exposure.
It’s important to emphasize that we do all the above steps in communication with you. We want to make sure you understand and are on board with our investment philosophy and strategy because your trust is essential for a successful relationship.
This kind of ongoing communication is so crucial that we think all financial advisors should provide it. We’ve said this before, and we’ll say it again: Many financial advisors charge similarly, but they don’t offer the same proactive communication or level of service. If your advisor isn’t doing the above steps, then you may be well-served to find an advisor who does.
Our Greenwood Village fiduciary financial advisory firm offers a complimentary 15-minute call. We can briefly discuss your financial situation and concerns and share how we may be able to help.
This material was prepared by Kaleido Inc. from information derived from sources believed to be accurate. This information should not be construed as investment, tax or legal advice. This commentary reflects the personal opinions, viewpoints and analyses of the Stordahl Capital Management, Inc. employees providing such comments, and should not be regarded as a description of advisory services provided by Stordahl Capital Management, Inc. or performance returns of any Stordahl Capital Management, Inc. Investments client. The views reflected in the commentary are subject to change at any time without notice. Nothing in this piece constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Accessing websites through links directs you away from our website. Stordahl Capital Management is not responsible for errors or omissions in the material on third party websites and does not necessarily approve of or endorse the information provided. Users who gain access to third party websites may be subject to the copyright and other restrictions on use imposed by those providers and assume responsibility and risk from the use of those websites. Please note that trading instructions through email, fax or voicemail will not be taken. Your identity and timely retrieval of instructions cannot be guaranteed. Stordahl Capital Management, Inc. manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.