Six Phrases Advisors Should Never Use

Updated on

Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

Virtually all financial advisors are saying the same thing, have no real brand, and are relegated to relying on word of mouth or referrals to get leads.

Get The Timeless Reading eBook in PDF

Get the entire 10-part series on Timeless Reading in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.

That’s a sorry, miserable way to run a business.

Most financial advisor websites, brochures, and social media campaigns are generic. Their jargon is meaningless. If you’re using any of these six terms then kick them to the curb.

"Comprehensive financial planning"

Please tell me, what is the difference between “financial planning” and “comprehensive financial planning”? You would hope that if a financial advisor is going to sit down and put together a plan that it wouldn’t be incomplete. You would only assume that the advisor knows that you’re going to retire at some point, you need to pay taxes, you need to save money so you don’t run out, etc.

In other words, the definition of financial planning naturally includes the quality of being inclusive of the every single thing that a client needs, especially since all you advisors are touting your services as being the most customized and personalized experience that clients will ever have.

The irony is that most comprehensive financial planning services aren’t that comprehensive. If they were, than why is it that when I was an advisor I saw such glaring oversights in my clients’ planning? One guy came to me with his ex-boyfriend listed as a beneficiary on his 401(k) account. Why didn’t his past advisor catch that? Or how many advisors will actually reach out to your accountant and ask for last year’s tax return just to verify that everything went okay?

See, that would be comprehensive service.

"Customized portfolio"

The word “customized” is misleading in this case. A portfolio should be designed to meet the unique risks and return preferences of the client, otherwise you’re in a fiduciary breach. That doesn’t count as customization. That means you’re complying with basic guidelines.

Every portfolio is designed according to a model and usually Markowitz theory. So if we’re all using the same recipe then how can the cookies taste that different? Oh, you mean to say that instead of 55% bonds, 10% cash and 35% equities for a conservative portfolio your version is 53%, 17%, and 30%?

That is so customized! I always thought I needed 7% more cash than the next person!

And guess what. Customized portfolios go down just as much as standard models in a market crash.

Here’s an example of customized portfolio management. I’ve written about Vanderbilt Financial before. It’s a broker-dealer specializing in sustainable investments. Vanderbilt advisors who put together portfolios comprised of impact investments that the client specifically had requested are building customized portfolios.

By Sara Grillo, read the full article here.

Leave a Comment