The Seven Roles of an Advisor
What is a financial advisor for? One view is that advisors have unique insights into market direction that give their clients an advantage. But of the many roles a professional advisor should play, soothsayer is not one of them.
The truth is that no one knows what will happen next in investment markets. And if anyone really did have a working crystal ball, it is unlikely they would be plying their trade as an advisor, broker, analyst, or financial journalist.
But in reality, the value a professional advisor brings is not dependent on the state of markets. Indeed, their value can be even more evident when volatility and emotions are running high.
There are at least seven hats an advisor can wear to help clients without ever once having to look into a crystal ball:
1. The Expert: Investors need advisors who can provide client-centered expertise in assessing the state of their finances and developing risk-aware strategies to help them meet their goals.
2.The Independent Voice: You need the the value of an independent and objective voice in a world of product pushers and salespeople.
3.The Listener: A good advisor will listen to clients' fears, and provide practical , long- term answers.
4.The Teacher: It is just a matter ot teaching investors about risk and return, diversification, the role of asset allocation, and the virtue of discipline.
5. THE Architect: Building a long-term wealth management strategy that matches each person's appetites and lifetime goals.
6. The Coach: Even when the strategy is in place,doubts and fears inevitably arise. At this point, the advisor becomes a coach, reinforcing first principles and keeping the client on track.
7. The Guardian: The long-term role for the advisor is a kind of a lighthouse keeper scanning the horizon for issues that may effect the client and keeping them informed.
However you characterize these various roles, good financial advice ultimately is defined by the patient building of a long-term relationship founded on the values of trust and independence and knowledge of each individual.
