PWA
doesn't specialize in only one area of financial planning. We play the
role of general financial practitioner, serving your needs in planning, risk
management, employee benefits, tax, investments, retirement, and estate
planning. While there are other comprehensive financial advisors out
there, many companies that call themselves advisors only focus on or two of
these aspects. You may have experience working with some of them:
Stock Broker - eager sells you stocks (since he's typically getting a commission per transactions). Thinks that if the stock is "undervalued", its a good investment for you. Usually doesn't consider your risk tolerance, retirement plans, tax implications, etc. He gives you advice, but it's usually not tailored to your needs.
Insurance Agent - eager to sell you insurance, especially life insurance. Uses life insurance as an investment vehicle, even if there are better ways to invest your money. Usually pushes permanent, complex (high-commission) policies that you don't understand and doesn't have knowledge of alternate investments.
Financial Planners - many do very detailed, complex financial plans, at costs usually over $200/hr They take the time to get to know you so that then can produce an accurate plan (after all, you're paying by the hour), but if they only focus on planning, they send you to others to implement the plans and continue to charge you hourly if you need their involvement.
Stock Pickers - while many are very talented, their goal is simply to beat an index and/or perform better than their pears. They aim to earn a return, potentially by taking big risks, that may not be commensurate with what your financial situation demands. On top of that, studies have shown that most stock pickers cannot consistently beat their benchmark index.
Passive Asset Managers - index-oriented investors who believe the market is always right and that there are no opportunities to achieve better than market results (generally correct). While these professionals generally do understand your risk tolerance and goals to create an asset allocation that is right for you, they generally only focus on asset management and have a tendency to ignore the other facets of advising.
Tax Advisers - typically concerned with minimizing the amount of taxes that you pay vs. the comprehensive advisor who's goal is to maximize your net worth (or even more generally, your long-term happiness). Tax is a consideration in decision making, but for tax advisors, frequently it's the driver.
Estate Planners - specialize in legal documentation (wills, trusts, etc.), and administration of estates. But, because of their high hourly rates, people don't always take the time to paint a clear picture of what they desire from an estate planning perspective and the result is incomplete documents.
401k Consultants - the companies that send you a statement in the mail with your 401k statement stating that they've analyzed your holdings and generally feel you're exposed to too much (or too little) risk. They offer to manage and rebalance your portfolio for you based on their calculations, but they know nothing about your goals or other financial assets.
This list goes on and on. And, while many of these professionals are credible and are good at what they do, they cannot achieve the synergies associated with having a single representative who knows you, managing your financials. Have you ever tried to get your investment "guy" to talk to your tax prep "guy" and been in the middle of that conversation? If you have, you now understand the value of having a comprehensive advisor in PWA.
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