285 N. El Camino Real
The proverb, “Too many cooks in the kitchen spoils the broth,” is good advice – especially when it comes to financial advisors.
Consider multiple cooks all wanting to make a soup, yet they can’t agree on how it should taste.
Some want more spices, others a thicker broth while still others want to add ingredients typically not used in soup at all.
Despite the best intentions, the end result fails to live up to expectations.
When an investor works with multiple advisors, conflicting investing styles can negatively impact investors’ portfolios.
The answer is to partner with a single trusted tax and financial advisor who sees the big picture and understands how all the investments work together.
We at Campbell Wealth Advisors want to be your single advisor and here is why:
Without one advisor to look at the entire pool of assets and the actions being taken, it falls to the investor to understand if the actions of the advisors will cause unintended tax consequences for the entire portfolio.
Without a single trusted advisor to create a complete financial plan, the investor remains responsible for thoroughly reviewing every aspect of his or her financial life. Your financial plan should be updated frequently to reflect any changes to your goals or family dynamics.
When assets are managed by multiple advisors, investors must determine their own asset allocation. Most people tend to overweight their allocations based on emotions like fear and greed. The risk is that while parts of a portfolio are properly allocated, the overall portfolio is not. The consequence is a potential reduction in expected return.
Without a single advisor in place, it falls on the investor to manage the correlation of their overall portfolio. It is important that the investments selected are not too similar or overlap, because this could result in an unintentional concentrated position or strategy. The various investments should offer checks and balances and reflect the investor’s changing situations.
Over the course of a working life, it’s common to acquire a 401k here, an IRA there and maybe even a defined pension plan someplace else.
A single advisor can pull all accounts together with a financial plan to better manage their tax consequences and turn their nest egg into retirement income.