An Investment Advisor Guide from Heritage Financial Management

If you are currently investing or want to get starting with investing for your specific goals, then it is important that you work with a Registered Investment Advisor, or RIA. Often times, we encounter 2 types of people: Those that have investments but, for lack of a better phrase, those investments are all over the place, and those that have not started setting money aside for their goals (ie, a house, education, retirement). Even if you do not fall into one of those two categories and you feel that your investments are in order, our local investment advisors can do a check up for you to make sure that everything is optimized and working efficiently for you.


One of the most common problems that we see with people is when their investments are scattered between different financial vehicles and not working in cohesion with one another. For example, they may have changed jobs a few times and have several old 401 (K) plans stuck with their old employer and maybe a few IRAs as well. We call this a financial “junk drawer.” We all have junk drawers where we put mail and other items around the house. Well, many people do the same things with their investments. They own a variety of investment vehicles, but they are located with different companies and are not optimized for your goals.


If you can relate to this description, then it is vitally important that you consult with an investment advisor. They can help you get all of your investments organized so that you have full control over your investment strategy and asset allocation. (401 (k) plans are often limited to the investment options delegated within the plan). In addition, when you work with a professional RIA, they can make sure that your investments are tax efficient as well. Different financial vehicles offer different options in terms of the tax benefits. Some offer tax deferred growth, while others, like Roth IRAs, offer tax free withdrawals. Depending on your age, financial situation, goals, and current tax rate, one option may be better than the other, and therefore, it is up to your investment advisor to make the proper recommendation to maximize your asset growth.


In general, an investment advisor can provide you with asset allocation strategies, tax efficient investment recommendations, 401(k) optimization techniques, and a variety of investment guidelines when choosing between different financial vehicles, such as IRAs, mutual funds, stocks, bonds, annuities, and all other investment options that may be suitable for you to reach your goals.


When you fill out the form to the right, you will receive a FREE investment analysis (sample), a NO OBLIGATION & FREE 1 on 1 consultation with a top local investment advisor, and most importantly, peace of mind. You will gain peace of mind because 1 of 2 things will happen when you have your initial consultation:
1) The advisor will tell you that everything looks great and is in order and you can pat yourself on the back, or
2) The advisor will make recommendations on how to improve your financial plan based on your goals.

Either way, you will walk away knowing exactly what your next steps are.



What is Investment Management?

Investment management is a common term that refers to buying and selling of investments within a portfolio. To achieve specific goals for the investor, investment management is the concept to develop advanced portfolio management strategies to accomplish this.  Investment management is a very competitive business with many different types of service providers. Numerous financial and non-financial companies now feel that savings and investment products and services are their core to financial planning. As a result, a number of reasons have made investment management one of the fastest growing and competitive businesses in the financial services industry. These factors include large growth in assets under management, the globalization of capital markets, the increasing of investment alternatives, changes in client demographics and relationships, and rapid technological advancements.


A financial advisor will consult with their client about their investment options then partner with an investment management team to create a diverse portfolio for their client.  Investment management is also commonly associated with wealth management. Investment management teams develop and manage diverse investment portfolios and discretionary funds for individuals, foundations, institutions, corporations and governments.


Asset management and fund management are terms used within investment management. Asset management is used to refer to the investment management of collective investments. Collective investments combine the assets of numerous individuals and organizations to create a larger more diversified portfolio. Fund management refers to all forms of institutional investment along with investment management for private investors. Investment managers who specialize in advisory or discretionary management on behalf of high-net worth private investors usually refer to their services as money management or portfolio management.


Investment Advisor and Management Services

Investment management services include components of financial statement analysis, asset selection, stock selection, plan implementation and ongoing monitoring of investments. An important aspect of investment management is balanced portfolio management. A portfolio should be created to accomplish your specific goals, both in the short term and long term. An investment manager will take into account the client’s risk tolerance, current situation, and future goals. Based on the assessment of your financial status, an advisor and investment manager will recommend the appropriate investment strategies.


Asset allocation is one strategy that is often suggested regardless of your situation. The process of allocating funds among stocks, bonds, real-estate, and commodities is what the investment manager will assist the client with, with stocks and bonds being the most common for the majority of individuals. These type of assets show different market dynamics, and different interaction effects; therefore, the allocation of money among these assets will have a significant effect on the performance of the portfolio. And accordingly, the investment manager will look at the long-term returns of these assets.


Diversification is vitally important to investment management and creating a balanced portfolio. The investment manager will get an understanding of your risk tolerance and goals when determining the amount of diversification within the portfolio. Effective diversification requires management of the relationship between the asset returns and the liability returns.  Investment managers will make sound investment decisions based on macroeconomic forecasts, and fundamental quantitative and technical analysis.


Unfortunately, there are many people on TV and the radio who actually discourage working with an advisor because they feel that you can do it by yourself and should listen to their advice. While you can invest on your own by picking your own stocks, bonds, mutual funds, and asset allocation strategy, do you have the time and knowledge to know for sure that you are not making any errors? Will you constantly be up-to-date on the newest products and changes in the economic landscape that will have a direct impact on your financial situation? Moreover, these TV personalities do not understand your personal goals, and your investment strategy needs to be based on those goals, not “rules of thumb,” which is what you get on these financial advice shows.


In conclusion, we highly recommend that you at least receive a FREE consultation with a local investment advisor so that you can make an educated comparison before using a professional or going at it alone.