This question is a loaded one… but let’s answer it honestly and see what’s in it for you and for the advisor.
As a financial advisor, it is easier for me to handle all the money because I can invest the money based on our financial plan and strategy. If part of your money is with another advisor, I have to work around their investment strategy and try to fit my investment portfolio to complement theirs. This waters down your financial plan and strategy.
Imagine having 2 different construction companies build your home at the same time. There will be confusion because each will have their own way of doing it, a preferred architect they work with, and their preferred supplier. You might even miss out on price discounts because half the material is being purchased by 1 and half by the other.
Isn’t it good to see if my current advisor is doing a good job?
A second opinion is always a good thing. I’ve had a lot of clients come to me and ask for my perspective on their current advisor’s portfolio management. They then “test the waters” with me and give me half their money until they feel comfortable bringing it all.
That’s all well and good, but at some point it’s best to choose one advisor because if the advisor knows that your successful retirement or wealth goal is completely in their hands, they’re more likely to be detail oriented. Have you ever had 2 babysitters watch your child? At first you think it’s double the protection, but in reality it can be detrimental if one thinks the other is watching yet neither of them are.
But I don’t want to put all my eggs in 1 basket…
Just because you work with 1 advisor doesn’t mean you’re putting all your eggs in one basket. Advisors typically use different investment vehicles, index funds, and mutual funds which diversify your portfolio so your money is in different baskets.1
If what you’d like are different ideas and strategies, then you can seek out a financial advisor that does financial planning without investing your money.
For example, I charge clients to look at their investment strategy with another advisor, I tell them my honest opinion, they pay me and I am done. It’s like going to another doctor for a second opinion. You paid that doctor but not necessarily worked with them.
When to Consider Partial Management
Existing Relationships
You might keep certain assets like cryptocurrencies or long-held individual stocks separate due to personal preferences or external advice.
Maintaining parts of your portfolio with another advisor due to personal or professional ties can be important for some clients.
Specific Niche
Some advisors might focus only on specific areas like financial planning, entrepreneurship, retirement, high networth individuals, etc. My specialty is wealth building based on a financial plan and money mindset.
If you need help finding the right advisor, I created a list of questions to ask a financial advisor to see if they’re a good match for you. Find that HERE
- There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. (26-LPL) ↩︎