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Wealth Adviser: Get Ready for Crowd-Fund Investing

By KEVIN NOBLET for The Wall Street Journal

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Crowd-funding may seem out on the financial fringe to most advisers, an activity not worth their time and effort. But its popularity is soaring as new platforms emerge for this form of private investing, and “advisers would do well to prepare themselves,” says Kelly Rodriques. He runs a San Francisco-based trust company that handles custody of non-traded assets for self-directed IRAs. Writing on Wealth Adviser at, he predicts that, “if they aren’t already, clients will be coming in and asking for the adviser’s opinion” about putting money into “something like an energy drink or a new healthy mac and cheese for kids.” If the adviser isn’t informed, “then the client will make the decision based on their own understanding of the investment,” he warns. “That’s a situation you want to avoid.”


Getting, and keeping, clients off the sidelines. Before the 2008-2009 financial crisis, clients had pretty much one concern: how to boost returns. Now, getting them to invest requires a different message–and some education in the risks of being too conservative, says Scott Farber, senior vice president and wealth strategist for U.S. Trust in Miami. “Once they understand what the product or strategy is, they can start making educated decisions,” he tells CNBC.

‘One safe place’ to invest money? If someone asked you to suggest a safe place to invest money for the next 10 years, what would you say? In a video by Wealth Adviser at, New York-based adviser Karen Altfest gives her concise answer: “There is no one best place to put money.” Her advice is to, among other things, invest “no more than 5% in any one asset.”


Fulfilling a dead client’s wish. Before dying, a client told Florida-based adviser Bill Carr he’d decided not to have his two children be trustees of his estate. But he never told his lawyer to make that change, and it fell to Carr to persuade his family to honor that wish. It was a delicate business, he tells Wealth Adviser at, and taught him a lesson: In future dealings with clients, he’ll “really push them to make the changes they want, even if it risks the relationship.”

It’s how you say it. A marketing firm that helps craft politicians’ messages is being used by wealth management firms to ensure they use client-friendly language, Reuters says. Rather than “risk tolerance,” for example, advisers should talk about a “comfort level.” And in reviewing alternative investments, it’s better to speak of “goals-based strategies” than “risk-based strategies.”


‘Robo’ advisers will change, not replace, humans. Online services won’t replace human advisers, says United Capital’s Joe Duran. “People need human help when there is complexity, or when the cost of being wrong is too high,” he writes on Investment News. But robo-advisers will have an impact on pricing, help to spread knowledge, and oblige successful firms to “create a platform that can delicately balance the use of people and technology.”

Read this article in The Wall Street Journal.