I have a statement to make. You may be surprised by its boldness.
Stereotyping is always wrong, even in financial advising.
I am reminded every day that no two situations are exactly alike. One pre-retirement married couple's financial and tax situation can look completely different than another couple's, even if they have approximately the same amount of money in the bank. It's one of the things that makes my job quite a lot of fun: that no two clients need the same exact plan.
So why do we financial advisors stereotype our clients? Why do we create categories and descriptions to fit you all into nice, neat boxes? Those are rhetorical questions, I won't try to answer them. It has come to mind, however, for with our thoughts turning to investment strategy here post-tax season, I am reminded anew of how gross generalizations can lead to poor investment strategies.
One of the ways we are combating this tendency to categorize using outdated and ineffective methods is utilizing Riskalyze as a client tool. I've been impressed over the years with how Riskalyze is doing away with the notion of age-based investing techniques, and employing data-driven solutions that are flexible, responding well to the constant changes we all have in our lives. They've taken out those large categories, and created an entirely new risk-based scale, that adjusts frequently based on the most important factor: the client. Check it out, and let me know what you think. I'd love to hear from you.