The Seven Roles of an Advisor

authorMay 6, 2015
Jim Parker, Vice President
Dimensional Fund Advisors
“Outside the Flags”
What is a financial advisor for? One view is that advisors have unique insights into market direction that give their clients an advantage. But of the many roles a professional advisor should play, soothsayer is not one of them.

The truth is that no one knows what will happen next in investment markets. And if anyone really did have a working crystal ball, it is unlikely they would be plying their trade as an advisor, broker, analyst, or financial journalist.

Some folks may still think an advisor’s role is to deliver market-beating returns year after year. Generally, those are the same people who believe good advice equates to making accurate forecasts.

But in reality, the value a professional advisor brings is not dependent on the state of markets. Indeed, their value can be even more evident when volatility and emotions are running high.

The best of this new breed play multiple and nuanced roles with their clients, beginning with the needs, risk appetites, and circumstances of each individual and irrespective of what is going on in the world.

None of these roles involve making forecasts about markets or economies. Instead, the roles combine technical expertise with an understanding of how money issues intersect with the rest of people’s complex lives.

Indeed, there are at least seven hats an advisor can wear to help clients without ever once having to look into a crystal ball:

  1. The Expert: Now, more than ever, investors need advisors who can provide client-centered expertise in assessing the state of their finances and developing risk-aware strategies to help them meet their goals.
  2. The Independent Voice: The global financial turmoil of recent years demonstrated the value of an independent and objective voice in a world full of product pushers and salespeople.
  3. The Listener: The emotions triggered by financial uncertainty are real. A good advisor will listen to clients’ fears, tease out the issues driving those feelings, and provide practical, long-term answers.
  4. The Teacher: Getting beyond the fear-and-flight phase often is just a matter of teaching investors about risk and return, diversification, the role of asset allocation, and the virtue of discipline.
  5. The Architect: Once these lessons are understood, the advisor becomes an architect, building a long-term wealth management strategy that matches each person’s risk appetites and lifetime goals.
  6. The Coach: Even when the strategy is in place, doubts and fears inevitably arise. At this point, the advisor becomes a coach, reinforcing first principles and keeping the client on track.
  7. The Guardian: Beyond these experiences is a long-term role for the advisor as a kind of lighthouse keeper, scanning the horizon for issues that may affect the client and keeping them informed.

These are just seven valuable roles an advisor can play in understanding and responding to clients’ whole-of-life needs, which are a world away from the old notions of selling product off the shelf or making forecasts.

For instance, a person may first seek out an advisor purely because of their role as an expert. But once those credentials are established, the main value of the advisor, in the client’s eyes, may be as an independent voice.

Knowing the advisor is independent—and not plugging product—can lead the client to trust the advisor as a listener or sounding board, someone to whom they can share their greatest hopes and fears.

From this point, the listener can become the teacher, architect, coach, and, ultimately, the guardian. Just as people’s needs and circumstances change over time, the nature of the advice service evolves.

These are all valuable roles in their own right and are not dependent on outside forces such as the state of the investment markets or the point of the economic cycle.

However you characterize these various roles, good financial advice ultimately is defined by the patient building of a long-term relationship founded on the values of trust and independence and knowledge of each individual.

Now, how can you put a price on that?

saute image ckCharles Kochel founded Yield Wealth Management to help people and foundations invest and do good. To learn more about Yield Wealth or set a time to visit email

This blog is not to be used for investment advice.

Put Your MONEY where Your HEART is.

Producing abundance of impact with our money is making the world a better place.

Newtons Law: For Every Action, There Is An Equal And Opposite Reaction.

What we are seeing in society is ugly, on both polar ends. It’s Newton’s law. It’s great to see people standing up, for what they believe in – it’s fundamentalist, on both ends, making it ugly.

At Yield Wealth, we talk a lot about “what matters most to you?” Everyday we have conversations about passions and beliefs. Most of the time, money invested supports volumes of companies working directly against what is most important to the client.

Stock means ownership, nothing more, nothing less. So why would you own a company that supports everything you’re against?

do good

The movement toward investing in what’s good instead of just screening out what’s bad is growing, fueled by a new generation of investors – Millennials (gen Y, gen x and a few boomers) are questioning conventional systems and approaches across the board, from food to education to finance.

That’s leading to conversations about aligning personal and family investments with values. A recent Morgan Stanley Institute for Sustainable Investing poll found that millennial investors and women generally are the most likely to invest for impact. Overall, 71 percent of investors are interested in sustainable investing, defined as “making investments in companies or funds that aim to do market-rate financial returns while pursuing positive social and/or environmental impact” — INVEST, DO GOOD.

which way

Historically (2005 – 2008), $3+ Million was the “water mark” for impact investing. It’s true, we can customize amazing portfolios of “Core Impact” investments at this level. But, times are changing and impact 1.0, a high cost, high risk limited information platform is in the midst of rapid evolution. A study, Impact 2.0, led by CASEi3, Duke University (2012), concluded that the cost and risk are at par with other core investments. It is possible to serve two masters – Profit and Do Good.

Now, 2015, we are at a level of knowledge, education and experience where, at any level of assets, you can invest for profit and do good. It’s a matter of choice. (Impact 3.0 or Core Impact)

Align what matters most to you and we’ll help you create a portfolio of action, supporting your beliefs. So, what are you waiting for, put your money where your heart is – seek profit and do good.

saute image ckCharles Kochel founded Yield Wealth Management, with the purpose of bringing “Mindful Wealth Management” to the south. Yield Wealth is one of the first benefit corporations in Arkansas and is leading the charge, helping people, foundations and endowments align their assets to what matters most in life, seeking profit and doing good.

This blog is intended for information purposes only – not investment advice. Contact to set a time for conversation about our beliefs and capabilities.