Wednesday, February 27, 2013

Finding your one thing ...

I enjoyed a blog post from Bernie Greenberg, a colleague in Denver that specializes in estate planning and trust administration discussing the benefits of "specialization" and specifically entrusting specialists to handle a specific need you have.
Bernie hit the nail on the head with this post, I've been talking with my oldest son about this topic just recently.  It took me about 10 years to figure this concept out in my own life, which culminated in myself selling my first business in my early 30s to focus on my second business.

I firmly believe that you can only be REALLY good at ONE thing ... and the more 'things' you try to be good at, the worse you are at all of them.  Bernie speaks about hiring specialists, but the same concept applies to your own life ... specializing on being great at one thing vs. being a 'jack of all trades' results in quality output and ultimately more happiness for you and the people you deal with whether they are your family members, customers, co-workers or your employer.

In fact, if you haven't noticed our company slogan is "the power of one" ... which has multiple meanings, but mostly is oriented about this concept of keeping things simple and just doing one thing really well.

City Slickers - Find your one thing ...



In our industry, we have the same problem that Bernie speaks of, most investors who hire a professional to manage their investments, hire a 'Financial Planner' or  'Financial Advisor' or even an "Investment Advisor" that ultimately do a terrible job of helping their clients grow their investment and more importantly protect their investment from declines in the market.

The reason for this terrible performance is that they are not specialists.  Most Planners are really good at taking an average person (that has little time or desire to do it themselves) and allocate their portfolio based on the person' risk tolerance and future needs.   They are great at creating financial plans (i.e. if you want to retire with xx dollars in 20 years, you need to earn xx percent a year and save an additional xx a month to achieve your goal), but most are terrible at managing the actual investments.

Managing money is a full time job ... watching the markets requires total attention and expertise.  Good financial planners AND the super wealthy know this, and as a result hire a specialist, called a "Money Manager". 

While planners are smart enough to do this, their time and focus are usually oriented around customer retention and quite simply sales ... getting new customers ... NOT on managing their current customers' portfolios.  A 'Money Manager' will work with a Financial Planner and use the Planner's recommendations to invest the clients' money.  The huge advantage here is that you have one person is creating the plan for your future, and the other actually implements the plan.  But more so ... the Money Manager is 'managing' your investment on a day by day basis, watching over and protecting your investments, keeping them safe from decline.

This is why 97% of all Financial Planners underperform the market year after year after year ... it's 'the one thing'.  It's about focus and specialization, and just not having enough time in the day to do two things really well ... so instead they do one thing (planning for your future) well, and one thing poorly (managing your investments).

Bernie ... thank you for your post ... I enjoyed it ...

Check out Bernie's blog post at ... specialization


Similar questions this post answers:
what is a financial advisor?
what is a financial adviser?
what is a financial advisor in Denver, CO?
Difference between a financial advisor and investment advisor?
Difference between a financial adviser and investment adviser in Highlands Ranch, Denver CO?

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