The two main types of financial professional are Wealth Advisor and Portfolio Manager. But what can each of them do?
Over the years we have had great discussions with people about financial decision-making. It is tough for most people to make decisions on something they do not feel informed about. And with investment decisions, there is so much news that impacts the investment landscape, changes in taxation, and different investment options to choose from.
A Wealth Advisor is not able to do trades for their clients without speaking with them first. A Wealth Advisor must present the client with the investment recommendation or options. A Wealth Advisor has an obligation to explain each investment to you relative to your investment knowledge. Portfolio Manager When the financial professional you are working with is also a Portfolio Manager, they can provide more options with respect to the types of accounts offered.
For example, a client could state the risk tolerance for each account to be 20 per cent low risk, 80 per cent medium risk, and 0 per cent high risk. The client’s investment objectives for each account are listed in the IPS. For investment objectives, a client could state 40 per cent income, 60 per cent growth, and 0 per cent speculative/short-term trading.
A good Portfolio Manager adds significantly more value than the fees they charge. This is especially true if you value your time. With lower interest rates and higher costs, generating a sufficient return is important during your lifetime and during retirement. When investors talk about income today, higher income options exist with many blue-chip equities.
On Tuesday morning, a Wealth Advisor wakes up and some bad news comes out about a stock that all clients own. That same Wealth Advisor has three meetings in the morning and has only a few small openings to make a few calls that day. A Wealth Advisor must call each client to explain the trade and get permission to enter the trade.
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