When it comes to investing and retirement planning, there are more options than ever. There are commercials on TV. There are catchy slogans and recognizable logos and, in some cases, more offices in high traffic areas than fast food restaurants. You know the large banks and investment firms that are available but why might you choose a smaller, locally owned firm?
I’m not here to debate the merits of advisors in these firms. I can assure you there are good advisors and bad advisors at large firms and small firms. When it comes to advisors, do your research and always check FINRA’s Broker Check (www.brokercheck.finra.org) for disciplinary actions and experience. So if one doesn’t have better advisors, what’s the difference?
Oftentimes the environment itself can be the first noticeable difference. For some, a corporate environment may be more comfortable and more likely to be found at larger banks or investment firms where a dress code that might be enforced by a corporate office in Whoknowswhereville. All offices across the country may standardized décor and dudes in dark suits intentionally create the ambiance of authority and importance. Some small firms do this as well while others have the flexibility to create a more comfortable environment. Many larger firms also set performance expectations or required goals for their employee advisors. They may be required or at least rewarded for selling a certain amount of a type of investment product. They may even be reprimanded or terminated if they don’t meet those goals. I don’t fault the advisor here, but the structure of the relationship between the advisor and the employer can be difficult to navigate. Smaller firms may have goals as well but it’s usually dictated by the advisor and their ability to earn a living, keep the lights on and pay employees. The advisor would also have the ability to deviate from goals if it put the client’s best interest at risk without risking employment.
You may also have an easier time reaching an advisor at a smaller firm, at least you SHOULD have an easier time. For example, in my office it would be an extremely rare situation where I wouldn’t be the point of contact if you needed anything regarding your accounts or other questions you may have regarding your finances.
When considering working with a smaller firm, ask about their Broker Dealer. While I am a small, locally owned business, I work with a larger company to facilitate technology needs and security, compliance oversight, and actual custody of the clients’ assets. Small firms can be just as secure and technologically advanced as the big boys so don’t let that worry you.
Like most things, it’s not a one size fits all scenario. Don’t be afraid of checking out a small firm. It might be exactly what you’ve been looking for.
Written by Alex Vassey, a CERTIFIED FINANCIAL PLANNER™ at Vassey Financial Planning & Investments. With systematic planning and proven strategies, Alex Vassey helps families prepare for all stages of life from college savings accounts, to funding a busy and vital retirement, to handling long term care insurance needs. You can reach Alex via email at Alex@vasseyfpi.com or at his office, located at 140 Bountyland Road, Seneca, SC 29672.