(The opinions expressed here are those of the author, a
columnist for Reuters.)
By Hilary Johnson
Aug 22 Aaron Rubin counts many formerly
self-directed investors among his clients at Werba Rubin Wealth
Management in San Jose.
Usually, Rubin notes, these investors come in when they've
made a disastrous investment, or when they have a health scare,
and they realize there's no co-pilot aboard.
"They show up after they realize they did damage, or when
there's a crisis," Rubin said. "Then they say, 'I just need
A recent survey from Market Strategies International showed
that self-directed investors often need more help than they
realize. They tend to trade less frequently, have less money
overall. They may often have an inappropriate portfolio mix, the
research - admittedly, done by a firm that frequently consults
for the advisory industry - showed.
In short, inside every self-directed investor is a client
who needs an adviser.
It is not easy to bring on new self-directed clients while
they're feeling confident. To win them, advisers say they need
to demonstrate value by helping clients focus on the bigger
"Self-directed investors have usually been dealing with bits
and pieces," Rubin said. "We ask them how they've dealt with
other issues, like wills and trusts, and life insurance. We try
to bring everything in their financial lives into one cohesive
Once self-directed investors have been won over, they can be
some of the best and most loyal clients, said James Gambaccini,
managing partner of Acorn Financial Services in Fairfax,
"I like the clients who understand what we do, because
they've tried it themselves, and they have a greater
appreciation," he said. "They can be very sticky."
Gambaccini said he is careful to encourage clients who enjoy
trading to continue to be involved in the market, often by
setting aside a portion of the portfolio for them to manage
Terry Siman, an adviser with United Capital in Philadelphia,
says all his clients are self-directed, since his firm's model
encourages each client to be involved in the process. Indeed,
clients wanting to hand off all responsibility are often
encouraged to look elsewhere.
Siman, like Rubin and Gambaccini, says he finds clients by
asking them questions about the bigger financial picture. And,
he said, he takes every opportunity to do so.
For example, at a neighborhood barbecue, Siman may ask an
acquaintance about college savings for kids who are rapidly
getting taller, or about plans to help an aging mother who's
using a walker for the first time, he said.
"You have to be bold and ask personal questions, and find
out how they connect resources and life events," he said.
"Because it's more than individual securities. We're trying to
connect the dots. That's where we can make a difference."
(Reporting by Linda Stern; Editing by Nick Zieminski)