30-Year Wealth Management Evolution

I mentioned in my recent post “The Virginia House Project”. The building of “The Innermost House” continues to move forward with focused craftsman attention to the details necessary to create a lasting home. This is more than simply an experiment, but includes craftsmen with over 40 years of building experience, training new individuals interested in learning time-tested methods. Art, science, and learned hands are combined seeking a successful outcome. If this sounds familiar, remember my concepts of parallel universes. I compare these fine Williamsburg craftsmen to the world of dispensing advice and superb Advisors I’ve had the honor to meet, service, and work with. 

Experienced wealth management advisors design, implement and seek to fulfill family goals through their investment portfolios. They combine years of learning, with analytical tools and approaches carefully evolved over time.   

An elemental part is the risk framing process seeks to bring into material focus fundamental questions of purpose and meaning with clients. Risk should be thoughtfully defined and implemented to fulfill client needs. Many times, needs can be simply expressed as: Will I have the funds necessary, when I need them most. The human part of risk assessment is fulfilled through a myriad of approaches, many times including posed questions stimulating conversation with the client. Through this process advisor and client seek to attain a mutual understanding and agreement towards a sought-after outcome. Ultimately it is codified into some manner of Investment Policy Statement. This is certainly a critical element of the risk analysis and assessment approach. 

Like the well-built frame of the Virginia House Project, I propose that current Advisor approaches require more than what is done today to design successful results for clients. I leave you with these queries: Can human understanding of risk goals and tolerances survive unsupported by a frame? What is the frame you utilize? In defining and implementing client portfolios, what are your most successful methods for building this frame of understanding and realizing a successful risk result?

How confident are you that you know the risk you have…and have the risk you want?   

Note: The picture is taken from the Innermost House - Virginia House Project with permission.