Every day I speak with individuals that are considering retirement or need help with meeting their investment objectives. These people are referred by co-workers, friends, tax advisors or they are familiar with me from my years of serving the Lake Jackson area. When you are searching for a Financial Advisor, be sure to do one thing…ask questions.
The places you can find Financial Advisors are everywhere. For example you can find them listed in the phone book; recommendations from your local banks, insurance companies or tax advisors; they may even be participants in your social organizations, schools or church; however, always make sure you do a background check on any Financial Advisor by visiting www.brokercheck.finra.org, look for any disclosures.
Financial Advisors differ in many ways such as years of experience, investment philosophy, how they conduct their practice, compensation, accreditations, and overall purpose. These differing factors contribute to why Advisors put so much time, effort, and loyalty into choosing which firm will support them. Every client has different needs and require a unique, personalized service. Here at Baird, we have the freedom to focus on what is most suitable for our clients.
Allow me to expand on these differences.
- Years of Experience
If you had to have major surgery would you ask the Doctor how many of the major surgeries he has performed? Of course you would. The same applies to going to interview a Financial Advisor, ask them how long they have been an Advisor and if they specialize in a specific area such as retirement. You can also ask them the amount of assets under their management and if they would mind providing a few references.
- Investment Philosophy
An investment philosophy is a set of beliefs and principles that guide an investor’s decision-making process. My philosophy is to make investment and cash flow recommendations consistent to the risk tolerance and investment objectives of the investor. I prefer owning stocks or mutual funds that invest in the defensive sectors like utilities; telecommunications; healthcare; food and energy. These sectors tend to make profits in an up or down economy. These sectors tend to pay dividends that provide cash flow. Investment portfolios need to be adjusted for the rising inflation and/or rising interest rates we are experiencing. An adage says buy good stocks, bonds, mutual funds and hold them. When valuations decline it is important to understand a client’s comfort zone and discuss any portfolio adjustments.
- Practice
Advisors can work for banks and often are required to show clients bank products; other Advisors can work for insurance companies and are required to show clients insurance products; other Advisors can work for an employer and do Advisor business part time. I have invested 42 years being only a Financial Advisor establishing a philosophy, instituting a planning strategy and perfecting a “Live” process for my clients.
My "Live" Process…
Listen – I listen as you talk. Our relationship is built on trust and me listening to your dreams and hearing when your comfort zone has been disturbed.
Identify – I work with you to identify financial goals, cash flow objectives and risk tolerance.
Values Time – I recognize and respect the precious value of time. My communication with you is based on your instructions. My ongoing management and oversight is proactive to keep you informed and updated. A periodic review is important.
Exclusivity – My solutions will be exclusive to your family and circumstances.
- Compensation
Investors have choices for how they pay for investment advice and the brokerage accounts they prefer. The brokerage accounts differ mainly on banking functions available via check writing, debit cards, direct deposit and BillPay. The accounts offering the most services have higher fees. Brokerage firms offer incentives to households above certain levels to help reduce the fees.
The two ways investors pay for investment advice can be narrowed down to a brokerage services account, and an advisory services account. We can look at these account choices in a simple comparison and investors can determine which best fits their investment needs.
Brokerage Services Account
Fees are centered upon trades made in securities in the account. Such fees would include stock and option commissions, mutual fund sales charges, unit trust sales charges, etc. Any fees are paid when the trade (buy or sell) occurs with the commission being added to or subtracted from the principal amount. A “buy and hold” strategy could result in low costs for investors.
Advisory Services Account
Fees are based upon certain assets held in the account. Such fees could exclude money held in money market or cash and certain fixed income securities. The fees are paid in advance (quarterly or monthly) based on assets in the account times a percentage you have agreed to pay with the brokerage firm. The fees are subtracted from the money held in the account. A “trading” strategy could result in low costs for investors.
This simple comparison is meant for education purposes and is not intended to indicate that one account is better suited for an investor over the other. Advisors must consider the overall needs, objectives of the investor, anticipated trading activity, account size, and costs before recommending either.
- Accreditations
(CPWA® - Certified Private Wealth Advisor; RMA® - Retirement Management Advisor)
Investors see Financial Advisors with different accreditations after their name and wonder what they mean. Ask the Advisor to explain. Accreditations are important because they show that Advisors log continuing education hours to stay on top of industry rules and regulation and understand investment products and strategies. They also can show that Advisors may specialize in a certain field.
- Purpose
My purpose (why I am a Financial Advisor) is just as important as the process, maybe more so. If you look around our community you see accountants, attorneys and doctors that work well past age 65, why? It is all about the relationships we have with our clients. As professionals we work with client families, their children, and their children’s children as trusted Advisors. We provide a valuable service that our clients trust and need, so we keep working to be there for them. That is why I do what I do. It has been very rewarding and I plan on working another 15-17 years, God willing.
Understanding and knowing the ways that differentiate financial advisors will educate and better prepare you, thus giving you more confidence in making decisions for you and your family. A prospective client once asked me 2 questions that I think are important to understand:
How much does an Advisor’s recommendation cost me?
How much will the Advisor get paid?
Gary Foose is a Financial Advisor with Baird Retirement Management in Lake Jackson. Baird is located at 208 Parking Way, Lake Jackson. Gary’s personal website is GaryFooseBaird.com. Gary’s email is gfoose@rwbaird.com and his phone number is 800-711-6137. Gary has a Retirement Management Advisor RMA® designation and a Certified Private Wealth Advisor CPWA® designation.
The information offered is provided to you for informational purposes only. Robert W. Baird & Co. Incorporated is not a legal or tax services provider and you are strongly encouraged to seek the advice of the appropriate professional advisors before taking any action. The information reflected on this page are Baird expert opinions today and are subject to change. The information provided here has not taken into consideration the investment goals or needs of any specific investor and investors should not make any investment decisions based solely on this information. Past performance is not a guarantee of future results. All investments have some level of risk, and investors have different time horizons, goals and risk tolerances, so speak to your Baird Financial Advisor before taking action.