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Sharp Financial Advisers Needed More Than Ever

By Denis Kleinfeld
Monday, 28 Feb 2011 08:42 AM Current | Bio | Archive

After sitting in a meeting between my client and his newly recommended financial adviser, I realized that there are troubles in financial adviser's paradise.

Basically, their sale pitch for the tried-and-true standard plans, which focus primarily on the United States, aren’t taking into account the world-wide integration and speed of international events that are occurring every day.

What I came away with from that meeting is that even local financial advisers have got to get up to speed on international opportunities. This is a new financial marketplace for investors, whether from gateway cities like New York to small towns that fill the rest of the United States. This is, I can see now, an entirely new and dominating aspect of the financial advisory business.

While individual professional money management was once the reserve for those with significant wealth and access to Wall Street, the growing need for the retiring boomers and semi-affluent is spawning a need for even small financial operations to be up on what is happening in the international market place. Putting 40 percent or 50 percent in a U.S. bond fund and the rest in some U.S. equity mutual fund isn’t going to cut it these days. The market place is worldwide.

There are a few primary factors that have changed the nature of the financial service industry. Technology, world events reported on a 24-hour basis, and a better-informed client who expects a much higher level of knowledge and service from their financial professionals.

For a while, Wall Street had an even sweeter deal than they have today. Financial information and research was tightly controlled by the large firms, their associated institutions, large investment banking houses and stockbrokerage operations. This is no longer the case.

Technology allows information to be available to everyone, everywhere in the world at the same time. Except, of course, the fine old tradition of insider trading and the still operating "good old boys" network.

It is not enough for a financial adviser to merely provide mediocre advice because what they are recommending have always been solid investment, tax or insurance products. People are looking to their financial advisers to make sense of a large number of related problems, which are both financial and personal. All of which, in reality, are dramatically impacted by events happening in all the corners of the globe.

What I see in the marketplace is a shift from financial advisers merely selling products to providing people with solutions. And these solutions will, of necessity, require the understanding that financial advisers are not advising just on the microcosm investments or solutions, but are required to understand the macrocosm impact as well.

What will be the outlook for financial advisers? There will some winners, some losers, and who they will be nobody really knows.

But without question, building and protecting wealth are still the key motivators for people who understand that they need financial advisers who can help them achieve some measure of financial stability in this topsy-turvy volatile world.

Financial advisers who understand and adapt their services to the international impact of investments are needed now more than ever.

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After sitting in a meeting between my client and his newly recommended financial adviser, I realized that there are troubles in financial adviser's paradise. Basically, their sale pitch for the tried-and-true standard plans, which focus primarily on the United States,...
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