All registered investment advisors are fiduciaries and put client interest ahead of theirs; whereas many financial planners earn commissions from insurance, stocks, and mutual funds and do not put client interest (commissions paid to planner) ahead of theirs (commissions “earned” to planner). Many planners are both as stock brokers and planners.
Active investment advisors like Harloff Capital Management, focus on changing client portfolios to attempt to conserve client funds in bear markets; whereas many financial planners rebalance once or twice a year independent of market conditions.
Active investment advisors like Harloff Capital Management, inform clients of historic market volatility in terms of maximum potential % loss; whereas many financial planners tell clients of obtuse standard deviation limits so as not to scare or fully inform clients.
Active investment advisors like Harloff Capital Management alter stock/bond ratios with market changes; financial planners usually keep 40% of client money in bonds to buffer market volatility. This 40% is essentially an insurance cost in bond investments that may lose money as interest rates rise, with inflation, and will hurt client investing.
A few active investment advisors like Harloff Capital Management, steeped in Ph.D. level math and computer simulation, try to determine bear market conditions by independent research; whereas almost no financial planners think this is possible and a futile exercise. Most financial planners are trained in sales and business but have little to no training in statistic model building or research.
In summary, many financial planners are busy selling insurance, stocks, and mutual funds to earn high commissions, and passively wait 6 or 12 months before changing client portfolios even if a bear market takes the market (and client portfolios) down 20% or more. Almost all financial planners depend on other firm’s client portfolio management resources and have little to no independent original portfolio management capability. This is why there is very little difference in portfolio management practice amongst the vast majority of financial planners.
Thus, there is a vast difference between the commodity and universal portfolio management practice of most financial planners who buy-and-hold; and active portfolio management practiced by Harloff Capital Management. Past performance does not insure future performance.
Contact Harloff Capital Management at 440-871-7278 to discuss how our active management may help you!