Managing Mom's Money: Financial Advisors' Daily Digest

by: SA Gil Weinreich


How better to concentrate an advisor’s mind than by thinking of his client’s money as if it were his mother’s.

Investors commonly feel like they’re getting rolled by their advisors, and hence distrust still abounds.

UBS says take profits, BlackRock says scoop up values and an SA contributor argues that today’s circumstances make the VIX index ETN both timely and cheap.

I was struck by the title (and content) of a new article on Seeking Alpha called "A Portfolio For Mom: Laying The Ground Rules." SA Contributor The Catalyst Tree. What better way to concentrate the mind of a financial advisor than by thinking of his client's money as if it were his mother's.

While one might immediately think that the relationship with one's mother is sacrosanct, precious, inviolate or any other stark term you can think of - I think the issue goes beyond the inherent specialness of the mother-child relationship to touch on the specific qualities of your mother specifically. In other words, you know her, her background, her personality quirks or, as it's called these days, her "money personality." All this illustrates not just how carefully an advisor should treat his client's money but also how customized the advisor's plan should be.

As The Catalyst Tree writes:

"Individual portfolio management seems to come with its own set of challenges - the most important of which being the very personal relationship and connection you have with clients' wealth."

And, indeed, he goes on to describe the straightened economic circumstances of his mother's upbringing, and more recent scars from equity investments gone bad as factors to consider in creating his mother's portfolio.

In short, how to invest one's mother's portfolio strikes me as a very worthy question for advisors to consider. Other clients' situations and personalities will surely differ. But what principles bridge these differences? Please add your thoughts in the comments section.

A propos of which, Tuesday's Daily Digest on the most common retirement mistake generated inordinate interest, and comments, from readers.

One theme running through the discussion is distrust of advisors who do not convey the feeling that they are treating their clients' money as if it were their mothers. To quote from rburton:

"I went through several 'sales' types [of advisors] until I found one I thought was honest, though I never really found out what they made in commissions."

That kind of sounds like the client settled for a least bad advisor, since no client should be confused about how he is compensating his advisor.

These comments, and today's lead article, all suggest a new line of inquiry for the coming weeks, to wit: How does one select an advisor? How does one know that the advisor he has found is one in whom he can repose confidence? And, importantly, how does one get the most out of one's advisor? Please let us know your thoughts in the comments section, and we'll see what further content we can develop for the benefit of advisors and investors alike.

And as is our wont, here, in brief, are a few links to recent articles of particular interest to financial advisors:

The Financial Advisors' Daily Digest will resume publication on Monday.

About this article:

Tagged: , , Financial Advisors, Building Your Business,
Want to share your opinion on this article? Add a comment.
Disagree with this article? .
To report a factual error in this article, click here