Recently, my daughter invited me to bake some cookies with her. She’s a 14-year-old ballerina who has a healthy social life —so of course I welcomed the invitation. I jumped right in by looking at the recipe and cracking eggs into a bowl full of the flour, sugar, and other dry ingredients.
I froze, uncertain of what I could possibly have done wrong in this brief 60 seconds of time.
I ran back through my actions and our conversation. I had not embarrassed her in front of her friends, asked about grades or boys. In fact, all I had done was crack some eggs into a bowl. Little did I know that this bowl already contained eggs. She had, in fact, started at the same place that I had, and the beaten eggs were buried beneath the dry ingredients.
This story came to mind recently when I spoke with a client who had another entire portfolio that did not have a clearly defined objective. This separate portfolio had a collection of advice from former advisors, past decisions and self-directed strategies that were somewhat cohesive but had not been revisited. Perhaps more importantly, these decisions were not necessarily part of an overall picture but rather each decision had been made in a vacuum. After reviewing their goals and objectives and re-establishing a risk tolerance, we examined these outside assets to determine how they could be integrated into an overall portfolio. With only a couple of strategic moves, we were able to reduce the risk and find an integrated strategy that will hopefully allow this client to accomplish their objective.
At the end of the day, the job of your fiduciary advisor is to give you the best advice that they can. To do that, they need as much information as you are willing to communicate. This may include information about insurance products, bequest motives, and assets that aren’t managed by the advisor who is asking the questions.
As a dad, I suggested to my daughter that we simply double the batch of cookies since making a double batch of cookies never seems like a bad idea. The point is that communication is key and allowing someone to have full visibility into what’s in your bowl or in your portfolio will almost always improve your results.