'Global' Positioning?

During our recent family vacation, I decided to add the GPS (global positioning satellite) option to our rental vehicle. While I have never had one in my personal car, we were going to be traveling in some VERY unfamiliar territory, and at hours of the day when I didn’t want to be trying to read maps, much less trying to guess how far to the next gasoline station in the middle of nowhere.

Over the long haul, it was a godsend. We got clear, quick, and for the very most part, accurate, directions to just about every location on our itinerary. Just about. Basically, the longer it had to react to the destination, the better it did. In close quarters – urban settings where the streets come up on you faster, and the opportunities to turn somewhat limited by traffic restrictions – well, let’s just say that my wife understands how I drive, and how I need to be directed - better than the satellites circling the earth, communicating with my car.

The analogy isn’t perfect, but when it comes to advice, some folks prefer to do it themselves – and they don’t mind unfolding a road atlas, mapping out a course, and keeping to it. Some prefer automated solutions – it was easier for the most part, and frankly more fun, keying in locations to obtain directions than it was to study a map and try to pick the best route. And some, of course, prefer to get their direction from a trusted source – someone who knows who the recipient of that counsel is, and expects…someone who can respond to “real-time” developments with concern, as well as expertise.

I think too often our industry attempts to compartmentalize investment advice delivery. We say that X% want to do it themselves, some other percentage wants to be able to get a quick automated sense of what to do, and some other percentage simply wants someone else to do it for them. But I think most people, actually want – and need – to tap into different kinds of investment advice at different points in time. They are happy to rely on an automated solution to fine-tune direction, or perhaps even to set it – they may well want to try to figure it out on their own, once they have developed a certain level of comfort with their ability to do so – and, when things get “hairy,” they’d much prefer the reassurance that most often comes from the voice of a real human being who knows their name.

Advice, in other words, shouldn’t be targeted at people as though they were simply a certain type of investor, IMHO. Rather, choosing the “right” medium for investment advice is, and should be, a decision based on an individual investor’s particular needs at a particular point in time.

- Nevin Adams editors@plansponsor.com

Comments

Popular posts from this blog

Is the 401(k) Really a ‘Horrible’ Retirement Plan?

4 Fiduciary Resolutions for 2024

Does Your 401(k) Need ‘Guardrails?’