Look Homeward, Investor

WHEN IT COMES TO WEALTH MANAGEMENT, USING LOCAL ADVISORS IS BEST

In the realm of finance, there is a well-known book about investing entitled “A Random Walk Down Wall Street.” The author is Burton Malkiel, a highly acclaimed professor at Princeton, whose resume and accolades go on for pages.

The premise is that when it comes to markets and investing, there is only so much the average investor can predict and control – especially in the short term. Mr. Malkiel argues that rarely does an investor outperform the market averages over time. Markets have a mind of their own and although they ultimately get from point A to point B, the path is often as crooked as a drunken sailor making his way back to the boat.

For investors looking to build wealth, the random path of the markets is often a frustrating and challenging endeavor. Wall Street has much to offer, but it is also as dangerous and tempting as the Las Vegas strip. Money can and should be made there, but all too often, unseasoned investors are left holding an empty bag.

The key to successful wealth management is to avoid doing the same random walk down Main Street when seeking guidance and advice. Stumbling from company to company, chasing hot tips, and absorbing hours of CNBC as gospel are detrimental to your financial health.

Finding a local partner can make all the difference in solidifying your long-term plan. Local firms are often founded and run by families and friends you already know. Due to those deep roots and connections, trust and character are easily identified, which top the list of desired attributes in a wealth manager.

Another top priority for a local outfit is genuine personal attention, which comes naturally when you’re already operating within a community network. Owners themselves are usually entrenched in the firm’s day-to-day activities, which yields stability and consistency in leadership for clientele as well as staff.  Having that direct relationship and pipeline to the decision-makers is notable.

For the uber-wealthy looking to jet set, a Wall Street offering may have the depth and personnel needed to better manage the yacht and plane. Large complex structures and ties to business needs are also fitting to a one-stop institution.

Of course, local or national, all the usual boxes should be checked when vetting a firm and its advisors: credentials, experience, cost, compensation, transparency, and of course a clean record.

For most of us out there, the benefits of a local advisory firm are tremendous. With the right approach, the local firms will be your bridge to Wall Street, while keeping the goals and attention focused intimately at home.