Recently, a financial advisor shared a story about a prospective client. The client had a problem. He didn’t like how heavily his portfolio was invested in the stock market. The risk just felt as if it was too much.
When the new adviser asked why it was invested that way, the client replied, “It’s the way my current adviser said the money needed to be invested.”
After spending considerable time to make a thorough diagnosis, the adviser suggested his client invest much more conservatively. It turns out that this particular individual had way more money than he would ever need. It could have been in cash, earning close to nothing, and he’d still meet his goals.
When he suggested the change, the client said, “You can do that?” It was the first time someone took the time to link his actual goals (low-risk investments and maintaining a steady income stream from them) to how his money was invested.