Client Portals

It’s all about you, or should be3 min read

Apr 1, 2015 - John Osbon ( 5 mins to read)

Do you ever wonder if your investment portfolio is really customized to you? Are you concerned that you might be part of some “mass custom solution” where tens of thousands of people with some similarity to you are thrown into the same portfolio? Do you suspect that your investments are really an assortment of product placements? Fair questions. Let’s look closely at what really makes you, you.

Getting personal
Let’s face it, people and relationships are complicated! What is important to your family and how do those priorities flow through to investment goals, family business interests, and philanthropic goals? Start with the facts. If you’re not sure what the best facts are, focus on what you know best – you! If you find your advisor conversation often wanders away from ‘you’ and too much toward ‘them’ then you know it is time for a change. You are the question, and the answer.  Circumstances like ‘last dollar’, cash flow in or out, personal tax situation, stomach for market swings, timeline and potential purchases, liquidity needs, “other” assets, career risk, earning power, and multiple generations are all personal factors that will influence your investment strategy.

Keep drilling down
Think about the questions your advisor has asked about your family. Do they get to the essence of your clan, or simply check off boxes on a survey? Osbon Capital uses “power questions” to expand and reveal your goals beyond the simple facts of your family. ‘What do you want your money to do for you?’ is a simple power question. The answers can be revealing and are always unique to you. We hired Resonance Insights last year to refine and upgrade our power questions for clients. These answers are written down for future discussion and to note when change is needed. Next, ask for what you want. Articulate your expectations and requirements for your investment portfolio, and for your advisor.  See 7 Ways to Raise Your Expectations for a convenient checklist. Do you see these expectations, such as vigilance against management fees, expressed in your investment policy statement and in your portfolio holdings? Pretend you are the head of a major endowment and you are doing your due diligence on a multibillion dollar portfolio. Pretending you have a few more zeros on the end of your portfolio can really help you maintain focus on executing the best possible strategy for you. Do these things and you are well on your way to ‘endowment standard’ investing.

Don’t accept the off-the-shelf solution
What do all investment algorithms, target funds and robotic advisors miss? By definition, anything they weren’t programmed to handle. Like the self driving cars at Google, investment algorithms simply aren’t yet ready for the road. Similarly, do you suspect that your advisor is following a direct set of instructions like the self driving car? Or are they capturing the complexity of your total family investment situation and responding appropriately? This is where experience can’t be replaced. At Osbon Capital that’s 25+ years.

Is your current advisor enabled to provide custom solutions?
The degree of customization in your portfolio may be strongly influenced by your advisor’s business model. If you work with a broker dealer, it’s important to understand that they are 1. paid to sell you products for their commissions and 2. they are held only to a suitability standard, meaning they are free to put their own financial interests ahead of yours. These two factors may result in portfolio holdings that have only minimal connection to your unique personal situation. Raise your expectations! How? Consider working with a fee-only independent advisor held to a fiduciary standard. You may save yourself from getting stuck with expensive commission based products.

John Osbon-

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