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Asset Manager or Financial Planner?

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Sep 21, 2008 5:11 pm

A question that i have struggled with my whole career. This thing about
being the trusted advisor and taking care of all their financial needs.
I am a CFP, so i guess i sort of buy into the idea of speaking with
clients on a big picture basis. And i was trained and always taught to
take a planning approach to 'strengthen the relationship" and “take the
focus off performance”.
But it seems to me that clients and
prospects come to us for Asset Management, and at the end of the day,
they dont give a rats ass how good we are at analyzing their cash flow,
or doing an insurance review. They want us to manage their money first
and foremost.
So this is something i struggle with, and go back and forth on, in my own mind. Curious to hear others thoughts.

Sep 21, 2008 8:32 pm

I think that the fact that clients and prospects come to you for Asset Management is simply because of how you present yourself.

  I look at the topic of your post, "Asset Manger or Financial Planner" and I don't quite like either.  Although, asset manager is much more lucrative than financial planner.   I present myself as someone who does financial plan IMPLEMENTATION.  Don't get me wrong.  I do have clients for whom I'm just managing assets.  I also have clients for whom, I'm simply doing fee-only financial planning.  However, because of how I present myself, clients use me for financial plan implementation.   This means that they know that I'm going to press them to take action on the things that they need to do to accomplish what they want to accomplish.    Both investments and insurance are almost always a needed part of this.  However, it's almost never about managing money to beat some benchmark or get a certain rate of return.  It's about accomplishing their financial goals.  Every recommendation goes back to their stated goals.
Sep 21, 2008 10:03 pm

Anon - to clarify - i didnt mean to say that my clients come to me for Asset Management. The debate is regarding the public in general.
I actually present myself as an advisor who looks at big picture before making any investment recommendations - where are you, where do you want to go and when, and what rate of return do you need to get there, then is it possible considering the level of risk you are willing to take.
Are you covered in terms of risk management (insurance) and is your lending situation optimal. (i dont necessarily use these words when talking to a client).

Some are interested in that approach, but a lot of people in my opinion seem to be more interested in me running their money.

So again, i am just questioning whether its the right approach.

Sep 21, 2008 11:33 pm

First, it's about the public perception of your firm and then you are an extention of your firm.

For example:  If you're at a wirehouse, you SHOULD be expected to 'manage' money compared to certain benchmarks, etc.  Why?  This is what the public has come to expect from advisors in the wires.   Second, what is your process?  If you're always talking about investment risk tolerance, then yes, you're an investment guy.  They may like you when things are good, but will jump-ship when things are bad (and blame YOU for the "bad investment".)   Hint:  If you want your clients to think of you differently, it starts with your process.   Third, how are you compensated?  What are you compensated to do?  Where is your main compensation coming from?  This has a direct bearing into what kind of job your clients think they're paying you to do.   Hint:  Without a substantially different process, your clients will ask themselves how they paid you and what they paid you for and paint you by that brush.  If they paid you a planning fee, you're a financial planner.  If they bought an insurance policy, you're an insurance guy.  If they bought asset management via asset-based fee, then you're an investment guy.   Yes, you do other things... but the public will consider them "free ancillary services" that you perform in addition to your main job.  We all know the value of the word "free" is nowadays.   If you want to be thought of differently... you must do things differently.  You must say and do different things.  Basically, you must have a completely different process to work your clients through so they will think of you differently.  Otherwise it's all just "lip service".   Also, while titles for our industry are vast, I think you should have a title that fits to the type of work you REALLY do.  - If you're a fee-only planner, then say that you're a Financial Planner.  - If you're an investment advisor, then say that you're an Investment Advisor.  - If you're an insurance salesman, then say that you're an Insurance Agent.  - If you do both insurance and investments, then say that you do Insurance & Financial Services.  (This is what my card says.)    If compliance would approve the title "Financial Strategist" I would use that.  Why?  Because what I do and the process I use IS DIFFERENT than what most financial planners and "financial advisors" do and I think I should use a title that reflects the kind of work I do.  Since it's not approved, I stick to "Insurance & Financial Services" to show the kinds of products I work with.
Sep 22, 2008 12:29 am

Ominous, excellent post.

  Sportsfreak, if we are talking about the public in general, I think that they don't have a clue.  We're all the same to them.   I would think that just the fact that you talk about things like rate of return and use terms like risk management would lead people to think of you more as a money manager.  Just as a comparison,  I rarely talk about rates of return and instead of "risk management", I tell my clients that if they are working because they need their income, they are buying disability income insurance. 
Sep 22, 2008 12:40 am

Ominous- +1 on Anons comment - great post.

OK - so let me rephrase the issue - clearly its all about marketing - how you position yourself.

But the question is - whats the best way to position yourself, in your opinion(s)
In the current environment, will you get more traction as an Investment Advisor, or FP

Sep 22, 2008 11:48 pm

I don’t think that it matters.  The man on the street doesn’t know the difference. 

  I'll get the most traction if I can say, "Sportsfreakbob spoke very highly of you and thought that I should introduce myself.  I have a meeting with the owner of your firm on Friday, do you have a few minutes at 11:50?"
Mar 29, 2019 7:05 am

Some firms focus solely on financial planning while others only provide asset management. Also, some financial planners or advisers will directly handle financial planning activities while outsourcing the management of your money.

May 28, 2019 4:24 am

Financial planning is a comprehensive assessment of your financial situation and your future goals. It involves creating a financial plan to help you answer important questions such as: How much do I need to save for retirement?
Asset management pertains to the investment of your money: building your portfolio, establishing a proper asset allocation, buying and selling securities, rebalancing as needed, etc.