People who are not familiar with Registered Investment Advisors (RIAs) too often view them as stock brokers. They are not; they are held to a higher standard and are focused on the client, not the money. RIAs are trusted advisors who put their clients ahead of themselves. They are fiduciaries that are skilled in the art making good financial decisions.
Younger professionals who are building careers would do well to find an RIA as their financial guru, a “Life Coach.” It takes time, experience and a high level of expertise to manage money well. The young lack that expertise but have the biggest advantage of all: time. They are in a perfect position to build wealth with the least amount of effort if they can lean on experts who can show them how to navigate the risky ocean of investing. Just as important, they need a wise guide who can advise them on managing their income. Too many people, even those with six figure salaries, live paycheck to paycheck. Knowing what to spend and how to save is the role of the advisor.
This is very important for the independent professional – the doctor or lawyer. Focused on building a practice, they need someone to advise them on managing their money wisely.
For the business owner, the entrepreneur, it’s even more important. There is no career track and the challenge of building a business often results in poor money management. Excessive debt can lead to bankruptcy, a common result in many industries that depend on debt financing. A good advisor can help the business owner create a personal portfolio that’s independent of his business. At the same time he can advise the owner the best way of financing his growth.
Once the business is established the owner needs guidance setting up retirement and benefit plans for himself and his employees. This all part of the RIA’s skill set. And finally, as the business matures and the owner starts thinking of retirement, the advisor provides the guidance to transition the individual and his family to life beyond work.
That’s the point at which the coach gets the pleasure of knowing he’s done a good job as part of a winning team.