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The Advantages of Working with a Small Firm

Investors have a wide range of options to choose from when it comes to financial advice. Banks, insurance companies, brokerage houses, wealth management firms and even online robo-advisors all offer investment guidance. While there might be a certain cache attached to working with a large Wall Street firm or a certain familiarity with the big-name brokerages you see advertising every Sunday during football season, at Northstar, we believe that bigger isn’t always better.

A large bank might have thousands of employees, but that doesn’t mean you’ll get to talk to a human when you need help. Likewise, if you have a question about a stock held by a mutual fund in your portfolio, you’re probably not going to get an answer directly from the fund’s manager.

With a small firm like ours, clients get more personal attention and direct access to the portfolio managers actually in charge of investing their money.

Here’s a look at some of the other benefits of working with a small firm:

  • Personalized service: All of Northstar’s clients are assigned to a primary portfolio manager, who serves as the clients chief contact. We also assign a secondary portfolio manager to each account, so there are always two managers familiar with each portfolio. A large firm may offer a dedicated advisor, but often only to clients with a certain minimum under management or for an additional fee. And instead of shuttling service issues through a 1-800 number, we have a team of service professionals who handle those tasks personally and are required to respond to client requests the same day.

 

  • Local decision making: Instead of farming out the selection of the securities in our portfolio to an out-of-state money manager, we make all those decisions in-house. A committee comprised of the principals of our firm oversee, research and set all investment strategies. This structure allows us to be far more flexible with our investments and adjust quickly to changing market conditions. The model also results in fees that are lower than industry averages because clients are not also paying a third party to manage their money.

 

  • Independence: These days many investment advisors are owned by larger firms that offer a variety of other products, including life insurance and annuities. While there’s nothing fundamentally wrong with selling additional services, it does create a potential conflict of interest for an advisor. Because the principals of Northstar own and operate the firm, we answer only to our clients and ourselves. We have purposely chosen this business structure so that we can deliver independent advice.

 

  • Less bureaucracy: It’s no secret that many large companies have a hierarchy that can be difficult for both clients and employees to navigate. In contrast, Northstar’s partners are easily accessible to clients and employees and our staff is encouraged to share ideas that can improve the firm’s operations and service. The entire firm meets every morning to discuss strategy, client concerns and a host of other issues. Strong, decentralized communication also makes it easy for our staff to execute such tasks as money transfers  and trades efficiently and accurately.

 

While size is just one criterion when considering a financial advisory firm, we believe that being small but mighty offers us a variety of advantages over our larger competitors.

 

 

 

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