Financial Firms: Big or Boutique?

NEST Financial is a boutique firm, and we’re proud of it. 

But what do we mean when we say “boutique”? The word conjures up images of small clothing shops with unique wares, customized to your specific wants and needs. Goods that can’t be found elsewhere. 

While at NEST we don’t sell clothes, we do offer up personalized services that you just can’t find at the big financial firms. 

And at a certain point in your life, you might find that your financial situation has become increasingly unique… and complex. When that’s your situation, off-the-rack financial services just won’t do. They might be adequate, but certainly won’t enhance and advance.

If you’re an entrepreneur, own multiple real estate assets, run a business, have reached a higher income level, or even inherited a sum of money that has changed your financial situation, you need the kind of bespoke financial services that a personalized, boutique firm can offer. 

So, let’s talk about the two — big firms and boutique firms like NEST. Then, armed with information, you can decide for yourself which will work best for you. 

 

Big Financial Firms

Who are we talking about when we say, “big firms”? They’re names you recognize even if you know next to nothing about finance — Merril Lynch, Edward Jones, Goldman Sachs, Fidelity. 

These huge firms are like the fast-fashion stores of the world: H&M, Forever21, Target, etc. They’re everywhere, you know the brand, and you know exactly what you’re going to get, because it’s the same thing every customer gets. 

There are definitely advantages to using this type of financial firm. Their ubiquity and notoriety inspire trust. And most of them have been around for quite some time, which for a lot of people means that they’ve stood the test of time. 

People know the brand, and the firms’ longevity speaks to their dependability. 

Because of their reputations, a lot of new advisors are drawn to working for these big firms. They can be a great way to gain experience and get clients, even for someone who’s fresh out of college. Some advisors get their starts at big firms and stay for the duration of their careers. Many go on to start their own firms or work for boutique firms, which is the path two of NEST’s own took.

It’s also true that the products and services that big firms offer can really work for people with simpler financial situations. If someone works a 9-5 for an employer, contributes to a 401k, only owns their primary residence, and has simple tax needs, their situation is relatively straight forward. The financial planning and investment management services that these big firms offer can be perfectly suited to this type of situation. The off-the-rack products they offer will likely be exactly what a client in that situation needs.

 

When Big Firms Don’t Fit

For some situations, going to a store like H&M might be ideal as well. Maybe the people who work there are new to the workforce, but they’re friendly and they know enough to direct you to the off-the-rack shirt you’re planning to wear to a family picnic. Maybe it’s not the highest quality, and maybe it doesn’t fit the exact shape of your body, but it’s quality and shape are generic enough that it’ll work just fine for that occasion. 

But if you need that shirt tailored so it fits you just right, you’re unlikely to find that level of service and expertise there. 

Like at H&M, this type of service can fall short when your financial needs become more complex, and therefore, more unique. 

The plan that’s designed for the average person fits only the average person perfectly. It just doesn’t do any more if you’re in a higher tax bracket, own your own business with its own employees, or are thinking about buying an investment property. 

Once you reach this point financially, the generic products and services of a big firm could struggle to respond to your increasingly unique and complex financial needs.

 

Boutique Financial Firms

Like the boutique clothing stores of our analogy, which offer unique and bespoke options for their customers, a boutique firm is smaller and more personalized, both in terms of their products, and in terms of their client interactions. 

With a boutique firm, the person you speak to is the person who is managing your portfolio. The financial planner you work with is in direct, daily communication with the investment manager. Both are working to ensure that the plan your team has worked out with you, is coming to fruition with the greatest possible efficiency. 

And if your already unique and complex financial situation should change, as it likely will, these team members are the same people you will meet with to make adjustments to your plan and portfolio. People who know you, who know your circumstances, and who have helped put your goals into action. 

As your finances become complex because of your growth, so should your planning and the involvement of your advisor.

Boutique firms are, by definition, not large. They don’t necessarily have the wide reputations that a lot of the big firms do. That can make people uncomfortable. That’s why we always encourage potential clients to do their own research. Don’t rely on the word of someone who is trying to sell you a product or service. Dig deep, check the financial advisors’ experience, read testimonials, scour their website resources. 

At NEST, we have nearly 30 years of experience, and we are a boutique firm by choice. We choose to stay small and personalized. That means we take fewer clients so we can offer the unique, bespoke services our clients need. We serve individuals, business owners, entrepreneurs, real estate investors, and startup founders — so we don’t offer off-the-rack fast-fashion. Our clients need products and services that are tailored to them. 

Large firms just can’t offer the same. 

That’s not to say that at big firms there aren’t great financial planners and investment managers. There certainly are. But their autonomy in making the best decisions for you and your finances often takes a back seat to their big firms’ requirements and quotas.

 

NEST: A Boutique Financial Firm

Because NEST is a boutique firm, even our portfolios are custom. They are designed and built by us. They’re not static, conforming to certain ratios because that’s what the firm or the model says to do. They are highly responsive to the macroeconomic environment and are managed based on daily economic data. 

This, coupled with your highly personalized financial plan, puts us in a position to help you maximize your financial growth and accomplish your goals faster and more efficiently. 

So yes, that off-the-rack plan might be better than something you try to create yourself. But it can never accomplish what a plan and portfolio built specifically for you can. 

 

Which is Better for Me: A Big Firm or a Boutique Firm?

That largely depends on where you are in your life. If you’re still early in your career, working for someone else at a 9-5, taking the standard deduction when you pay your taxes, and still working on building your rainy day savings, working with a big firm might be the choice for you — for now. 

But if your financial situation has grown increasingly complex, and you’re just not sure that your off-the-rack financial plan and portfolio is serving your unique circumstances optimally anymore, it’s time to hire a financial tailor. 

At NEST, we work for you, not a big financial firm. We have the experience, skills, and autonomy to always act in our clients’ best interest. We challenge you to find a big firm that can offer the same.

So if you’ve broken the mold with your financial situation, and need financial planning and investment that is customized to your unique situation, reach out to us to schedule a no-obligation call. You will speak with either Gloria Park, our managing partner and financial planner, Sean McDougle.  The same people that will comprise the team to build your dream. 

 

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DISCLAIMER: We are legally obligated to remind you that the information and opinions shared in this article are for educational purposes only and are not financial planning or investment advice. For guidance about your unique goals, drop us a line at info@nestfinancial.net.