Here’s why your clients investment portfolio should be as tailor-made as their wardrobes, reflecting their lives, not someone else’s.

Personalization is Key
Just as your client would select clothing to suit his body shape (pardon the gender reference here but this equally applies to everyone), style preferences, and the climate he lives in, his investment portfolio should be customized to his financial situation, risk tolerance, investment timeline, and goals. The financial instruments and strategies right for one person might be entirely unsuitable for another due to different income levels, responsibilities, lifestyles, and future aspirations.

Do prospects understand this in the first meeting with you?

It is very easy to brush this off and say ‘yes’, but it’s a super important point to understand and implement.  There might be some changes necessary in your first meeting with a prospective client

Risk Tolerance and Time Horizon
Would your client ever wear his friend’s tight shoes for a marathon just because they’re popular? Likely not, as he would choose footwear that fits well and suits the long distance ahead. Similarly, in investing, your client’s risk tolerance and investment horizon determine the “size” of his investments. If he is risk-averse, a stock-heavy portfolio might keep him up at night, whereas bonds or stable value funds might not provide the growth needed by someone comfortable with high risk and a longer runway.

Financial Goals: As Unique as Your Client’s Life
Your client’s financial goals are a function of his life’s unique journey—just like his wardrobe might change if he moves from a hot climate to a cold one. Someone saving for a home down payment in three years will need a different investment strategy from someone preparing for retirement in three decades. Copying a friend’s or son’s investment, who might be at a different life stage or financial condition, is like wearing their winter jacket in your tropical city—it just doesn’t make sense.

Avoiding the Trap of Performance Envy
It’s easy to feel envious when someone else’s investments outperform yours, just as it might be tempting to envy a friend’s outfit at a party. However, just because something looks good on someone else doesn’t mean it will work for you or your client. Investments, like clothing, should not be chosen based on current trends or external appearances but should be based on how well they help meet your client’s personal goals and objectives.

Custom Tailored Portfolio
A portfolio that is tailor-made for your clients financial needs and goals, much like a custom-tailored suit, will always fit better than something off-the-rack. It considers their personal circumstances, adjusts for their comfort level with risk, and aligns with their future goals. This might mean diversifying across different asset classes, picking investments that offer growth or income at different stages of their life, and adjusting the mix as their life changes.

Conclusion
Your clients investment portfolio is not a one-size-fits-all garment but a bespoke ensemble designed to fit their lives perfectly. Just as your client wouldn’t wear someone else’s outfit to an important event, he shouldn’t mirror someone else’s investment strategy. By ensuring your clients investment choices are tailored to their personal financial situation and goals, they’ll not only wear their investments comfortably but they’ll also be on their way to achieving their financial goals, stress-free and with confidence. Remember, in the world of investing, the best fit is always personal.

And when it’s done the right way (by real professionals), this is how it will look.