Everyone wants to see their business grow. That’s true whether you own a small restaurant or an investment firm. Some investors look at the size of the firm as an indication of the quality of the advice they will get, assuming that bigger is better.
But that is often the opposite of what they will experience. Most people are aware that some of the best restaurants are small, with just a few tables, catering to a select clientele. For the same reason, small investment firms are often better for their clients than large firms.
Large firms are the training ground for smaller firms. Large firms recruit people who have no experience as investment managers and train them in selling their company’s products. Once a financial advisor gains experience, he sees ways that his clients can be served better. That’s the point at which he forms his own small firm where clients get the benefit of his knowledge and experience.
Clients who do business with small firms typically deal directly with the owners, who work for them, rather than employees who work for a paycheck. As everyone knows, it makes a lot of difference when you’re dealing with the owner of a business rather than an employee.
Small firms are more flexible in meeting the needs of individuals. Everyone is not the same. Everyone has a different set of experiences, a different array of needs, and seeks a different level of service. Large firms create policies and procedures that stack people in silos and try to impose uniform rules on everyone. The larger the organization, the greater the need for uniformity and the less the business cares about any one individual.
If you have an investment portfolio worth a million dollars, an investment firm with assets-under-management (AUM) of $100 million will care about you and do its best to address your needs. A firm with AUM of $1 billion dollars will not care about you as an individual, you’re a statistic.
Korving & Company is growing Registered Investment Firm (RIA), but doing so in a way that makes sure that we always know our clients, care about them as individuals, and go out of our way to meet their individual needs.