Portfolio Objectives: What CWM Clients Look For In A Financial Advisor
At Cooke Wealth Management, our clients often value peace of mind and a financial advisor who helps them reach their goals. Many looked for wealth management professionals with knowledge, skill, and experience working with clients like them. And they found us.
What factors should clients weigh the most when looking for a financial advisor?
Knowing Your Investment Objectives
When you sit down with a financial advisor for consultation, he or she is going to want to know your goals and investment objectives. This helps them design a plan that meets your needs and works with your personal situation.
Before you make an appointment, consider thinking about what you’re looking for in terms of portfolio management or what this money is for. You can then communicate it clearly to your potential advisor when you meet. Maybe you want to ensure you have enough for retirement or fund a child’s or grandchild's college education in 15 years. Maybe you’re looking to leave money behind so that your spouse or family doesn’t have to worry about their finances after you are gone. Your goal might be as simple as - you want to be smart with your money.
Determine what goals guide your portfolio management decisions before seeking financial help. That way, you’ll be better able to work more effectively with your advisor from day one.
If you truly aren't sure about what your goals are, it's okay. In fact, that's the perfect time to reach out to an advisor. At Cooke Wealth Management, we meet our clients where they are and will often help them determine where they want to go.
Balancing Risk with Reward
High-risk investments typically offer the highest potential returns. As the risks go down so most likely does the possible reward.
The entire objective of investment portfolio management is to achieve a balance between risk and reward that's right for you. Different individuals have different goals for their investments and different comfort levels with risk, so different portfolio objectives are often needed. Some have stocks they’ve inherited from mom and dad, some own investment real estate. This is where personalized portfolio management comes in.
A well-managed, diversified portfolio is designed for investors to allocate their assets across several asset classes and accounts all working together to meet their individual goals. Portfolio managers can create portfolios designed to help you achieve income and wealth preservation goals, along with your growth goals.
Some investors aim for steady income with more modest returns. Others look for moderate growth with some wealth preservation. Still, other investors work toward maximum growth at any cost. When an investor has a balanced risk-reward portfolio in place, they often feel confident knowing this can help empower them—and ultimately their family—providing greater financial security no matter what market conditions may do.
As wealth management professionals at Cooke Wealth Management, we work with our clients attempting to determine the ideal risk-reward mix for their unique needs. For instance, an investor on the cusp of retirement might want to focus on generating income or protecting and preserving their wealth for their family, while a young investor with a longer horizon might benefit from more high-risk investments and yet another might value protecting income for their family's future.
At some point in your life, you will need to make a critical decision about how to manage your financial future.
As part of your financial planning process, consider what your objectives are for your portfolio today and where you would like it to be in 10 years. Your investment goals should ultimately dictate which assets are most appropriate for your investment portfolio.
Once you know your long-term goals, then you can begin looking at a mix of investments that align with those goals. There is no one-size-fits-all solution for everyone and it’s important to realize there are a number of different methods out there when considering how to build wealth over time.
But before you go there, ask yourself these questions:
How much risk am I willing to take?
How quickly do I want my money to grow?
Am I comfortable with investing more aggressively or should I choose safer options?
If you don't have an answer yet, don't worry! These questions aren't meant to limit your choices; they're meant to help guide them.
Let's take a look at several possible objectives individually and discuss why each might be relevant to your situation…
Retirement: Your post-career life could last a lot longer than you think. Research suggests that one-third of the 65-year-old women alive today will live to see age 95. Planning and saving for retirement is one piece of the puzzle, managing it to last and provide income or handle future Required Minimum Distributions (RMDs) is another. If you aren't financially prepared for a long retirement, you could face higher taxes, fewer resources, smaller opportunities, and the prospect of running out of money.
Children's education: Higher education is expensive. At public institutions, the average cost of tuition runs $9,400 per year, and at private institutions, that number goes up to $37,600 according to the National Center for Education Statistics. Investing in a 529 or other college savings plan might help you meet these costs for your children or grandchildren. Although, 529 plans are not the right solution for everyone.
Family events: Milestones can be exciting, but they can also shake up your finances. New jobs, new homes, marriages, caring for aging parents, or unforeseen medical expenses can take a big bite out of your financial reserves and savings. Investing with these events in mind can help you meet your family's changing needs and reduce or eliminate dipping into retirement savings.
Philanthropy: Do you want to share your wealth with people who need help? Investing your money can grow your ability to give to the missions that matter most to you. Giving appreciated assets from your investment account or using your retirement account, may be able to offer additional tax savings and help you maximize your charitable giving.
Wealth transfer: A survey from Ameriprise revealed that 77% of respondents plan to leave their children an inheritance. Only 50% of them, however, had a plan to do so. If you want to help your children and grandchildren by leaving them an inheritance, now is the time to develop your plans to leave a legacy.
Planning your legacy
It’s never too early to think about your legacy.
One of your financial goals might include leaving a legacy for your children, but it’s not always clear how to go about that. And when we say legacy, we don’t just mean financial legacy. Before you can leave a legacy, you have to first figure out what legacy means for you.
Does it mean leaving behind specific property or assets? Is having money left over after you pass away sufficient? Or are there other components, like achieving certain life milestones, passing on family values, or leaving a story of faith and generosity important to you as well?
Not all of these may apply, but thinking through each of them and making sure they match up with what matters most to you will make it easier for you to decide how best to leave a legacy.
From a financial perspective, the first step is often determining what kind of legacy you want to leave. Do you want to help pay for college education? Do you want to give your children a nest egg they can use for a down payment, or when they start their own families? Do you want them to inherit your home or other valuable property when you die? Do you have charitable intent? The answers here depend on what matters most to you, so take some time and really think about it before deciding on a plan.
The team at Cooke Wealth Management takes your legacy seriously. We listen carefully to our clients as they share their vision for a generational legacy that can make an impact on their family, the world, and when appropriate the Kingdom of God.
Giving, Serving, and Growing the Kingdom of God
Whether it’s charitable giving, volunteering, or helping our loved ones, generosity often plays a role in all of our lives.
For Christians, the Bible is very clear about giving back, sharing with others, and using worldly treasures in a way that glorifies God. I Timothy 6:17-18 says: Command those who are rich in this present world to do good, to be rich in good deeds, and to be generous and willing to share.
When most people think of generosity, they think of charitable donations. Certainly, part of generosity is giving to your church, a local charity, or a national or international organization that serves the needs of others. But that’s just part of what being generous is all about. Christian generosity can go far beyond simply writing checks to help fund mission trips and organizations around the world. It can also mean helping those who are less fortunate than us through efforts such as volunteering at homeless shelters, food banks, or family mission trips.
Another part of being generous can be taking care of those closest to us - especially when times get tough. The Bible talks about the importance of providing for our loved ones (1 Timothy 5:8). In our view, generosity does not necessarily mean solving all their problems. But when we're kind and caring towards those close to us, it can remind them that they matter, which may offer some security in times when they might be struggling emotionally or financially.
As Christian wealth management advisors, we want to help you grow your portfolio, preserve your wealth, invest in the future, and impact the world for the glory of God. To talk about how we can serve your financial planning needs, give us a call today.