Are You “Meaningful?” 5 Ways To Know

True story. “My advisor at (important name firm) told me my account was ‘not meaningful.” I heard this twice in one week from two different potential clients so I decided to write about it. We all want to feel important, as a friend, colleague or client. We all want to matter, to be “meaningful.” Are you meaningful to your investment advisor? And how do you know? Here’s a checklist to make sure you’re more than just a way to pay their overhead.

Where do you fit in?
Every business prioritizes its customer base to some extent. There’s nothing wrong with that. But where you fall in that priority list can have a big impact on the quality of the product you receive and the level of service you enjoy. Use these questions to gauge how meaningful you are to your investment advisor. 

1. Are you the right size?  What is the range of portfolio sizes of your advisor? You want to fall right in the middle as that’s the kind of account the business is built to serve. If you’re too small, you’ll get less attention, and if you’re too big your needs may outstrip the advisor’s ability to meet them. Think Goldilocks size for you, not too big, not too small, just right.
2. Whom do you talk to? The leader, the follower, or the mouthpiece? How often do you talk to the decision maker who manages your investments, if ever? Is that manager in the room with you or hidden away in a room full of computer monitors? This one speaks for itself.
3. How many other clients are there?  10, 100, or 1000?  If you’re one of hundreds, you can’t be all that special. Does your advisor really know you personally and understand your family situation, your business goals, and your plans for the future? Are you a name or a number? You might be surprised to hear how many clients your advisor has. Small is better, in my view.
4. How many businesses is your advisor in? Are you a client of your advisor’s main or sole business? Or are you getting one service but paying for others? We see this often with insurance agents who purport to be investment advisors as well. Or tax preparers who get rebates for referring you to their “expert” investment advisor affiliate. Has your advisor added more business lines because he can’t make enough money as an investment professional? That’s a signal that revenue means more than service.
5. Is your advisor public or private?  I believe that a private firm for private people is the best way to manage money for individuals.  Nonetheless, many clients end up with public companies, like JPMorgan, Morgan Stanley or Goldman Sachs.  When you work with a public company, shareholders come first (by law). Lenders, clients and employees all fall somewhere lower on the list. Despite what they say – and I spent 20 years on the public side trying to explain it away – “putting clients first” in a public company is a myth. You may think and hope you are getting custom, unbiased guidance from a shareholder-owned firm, but you can end up with an account full of high fee, underperforming, tax-inefficient proprietary mutual funds. We see these conflicts of interest all too often.

Raise your expectations.
That’s all you need to do to make sure you are in the right place with the right advisor. Make a list of things you need, want and expect, followed by the ‘nice-to-haves’. Sit down and discuss it with your advisor. If he/she can’t follow through, go shopping for a new advisor. The right one is out there waiting for you. Stay out of wealth management purgatory!

Here, you will always talk to an Osbon
As for Osbon Capital, we take great pride in working with a small number of clients who agree that portfolio management starts with ‘you’. And you’ll always talk to an Osbon here since we are owner-operators. There are no layers of management, no shareholders to appease, no big ad budget to feed, no extraneous lines of business, and nothing to distract us from the direct service of our clients. I assure you that every client here is very meaningful.

John Osbon – josbon@osboncapital.com