Let’s say you walk into a local financial advisory firm and you are considering them to help you with your retirement assets. You sit down with the adviser and he/she hands you a ‘risk assessment form’ (or something similar of a different name) for you to complete. You do so and hand it back to the adviser. The adviser then uses their ‘expert’ training (off of a scripted sheet of paper) to determine that you are at ‘X’ risk tolerance, which is typically the following:
Sound familiar so far? So, as your adviser studies your answers, it is soon determined by your adviser that you are ‘X’ risk tolerance. The adviser then offers you a ‘professional recommendation’ of stocks, bonds, mutual funds, etc that are ‘hand-picked’ by the adviser that best match up with your ‘X’ tolerance level. Makes sense, right? Here is where the ‘fast food’ mentality come in:
How were these funds ‘chosen’ for you? By a click of a button, typically, and the funds are usually pre-selected based on the number of commissions that are paid to the advisory firm. The funds are typically not ‘hand-picked’ by the adviser at all. So, as a result, this method is no different than going to your local McDonald’s and choosing Small, Medium or Large fries. The process is the same.
At Income For Life, we like to describe ourselves as a ‘sit-down dinner restaurant’. When you sit down at a nice restaurant, the food is prepared based on what YOU want. Want a medium-rare steak? Done. Want green beans instead of corn? You got it. Want ranch dressing on your salad? Fine. Your meal then comes to you – for you and prepared for you – based on exactly what you wanted.