Written by Tyson Ray, FORM Wealth Advisors | CFP®, CExP®, CIMA®
One of the most important roles of a financial advisor is helping oversee how your wealth is invested. Unfortunately, we believe most advisors, and the financial services profession at large, have been doing this wrong for decades. Too often, client portfolios hold thousands of positions scattered across accounts. On paper, it looks diversified. In practice, it’s unmanageable. Clients assume their advisors are monitoring and overseeing each holding, but the truth is that they can’t.
How I learned what not to do
I learned this lesson firsthand. In my early twenties, I apprenticed under Dick, a seasoned stockbroker with 40 years of experience. Dick was a classic stock picker. Whether you walked in with $10,000 or $10 million, you walked out with 10 to 15 stocks. He was good at buying. However, like many of his peers, he struggled with selling. His “buy and hold” strategy left clients with one or two big winners, but many losers.
When the tech bubble burst, I watched people’s life savings get cut in half. Some lost entire positions when companies went bankrupt. I realized then that my job as an advisor was not to help clients “make more money” but to help them live a better life. The solution isn’t chasing hot ideas. It’s creating a system rooted in stewardship, wealth preservation and sustainable growth to outpace inflation and protect purchasing power.
By the mid-2000s, I earned the certifications and qualifications to manage portfolios on a discretionary basis. That meant I could make changes across all client accounts simultaneously, applying our best ideas to everyone — not just to those I happened to catch on the phone first. It was a critical step away from the Wall Street sales model and toward true fiduciary care.
But there was another problem: Relying on the research of one firm wasn’t enough. Firms, like people, have biases. And I saw those biases firsthand. For more than a decade, I worked with A.G. Edwards, which was later acquired by Wachovia, and then by Wells Fargo after the 2008 crisis. With each change came a shift in “official” research recommendations. What was once right suddenly became wrong. That taught me a simple truth: No single firm has a monopoly on wisdom.
A better solution for our clients: Total Relationship Investing™
Out of that realization, we launched Total Relationship Investing™ (TR Vest™, for short). Our Total Relationship Approach involves three steps that address three distinct aspects of our client–advisor relationship:
1. Total Relationship Planning™ (TR Planning™)
Instead of discussing markets, returns or fees, we first want to hear about your sense of purpose. Tell us about your kids, your hopes and what’s on your bucket list. This part of the process is foundational. It gives us a blueprint for the best way to proceed in your best interest.
2. Total Relationship Investing™ (TR Vest™)
Your portfolio is just one of the ways you’re funding your life and your goals. We will create an investment strategy that’s aligned with your Life Plan, suits your risk tolerance and considers your need for income and liquidity.
3. Total Relationship Care™ (TR Care™)
In this step, you become fully integrated into the FORM ecosystem. You’ll soon receive our quarterly newsletter and invitations to events. Our robust client service system is also implemented in this step and ensures you receive exemplary care and support throughout the year.
A key component of The Total Relationship Approach™, TR Vest™ is our income-planning process that helps clarify, plan and direct all streams of incoming wealth, including active income, passive income and portfolio income.
Instead of anchoring portfolios to one firm’s outlook, we blend the capital market assumptions (CMAs) of three to six major institutions.
CMAs are long-term, forward-looking estimates of returns, risks (volatility) and correlations for various asset classes that we use to guide strategic asset allocation and build investment portfolios for our clients. These assumptions are based on economic and market analysis, historical experience and investor beliefs about how asset classes will perform over a specific, extended time horizon — typically 10 to 20 years.
These assumptions represent each firm’s best estimates for the future performance of stocks, bonds and other asset classes. Your portfolio is just one of the ways you’re funding your life and your goals. This proprietary process takes this larger picture into account. It also strives to change the focus from individual securities, markets or portfolios to the individuals themselves.
By averaging across firms, we reduce bias and create a more balanced foundation for portfolio design.
We take it further by blending multiple firms’ asset-allocation models and then building custom models for all our clients at FORM Wealth. And because we manage portfolios on a discretionary basis, when changes are made, they happen for every client, at the same time, at the same price.
That’s the essence of Total Relationship Investing: unbiased research, broad diversification, disciplined execution and alignment with your life — not Wall Street’s sales agenda.
