The Right Match

By working with her adviser, this investor's portfolio is healthy and well-balanced

Jacqueline Rhinehart has two abiding money management principles: Never give a financial adviser total control of your portfolio and invest in what you know. Rhinehart fired two financial advisers before finding one who respected her preferences and included her in the investment process.

Three years ago at a business conference, Rhinehart met Patricia M. Barksdale, vice president and senior financial adviser with Merrill Lynch in Newark, New Jersey. Within months, the two formed a close bond. Barksdale approached investing for her new client by considering Rhinehart’s interests in entertainment and health. Says the former record industry executive, “What previous financial advisers did was not always consistent with my objectives.” She now owns the six-year-old consulting group Organic Soul Marketing.

Rhinehart says her previous planners didn’t evaluate factors such as her plan to retire in the South, the possibility of caring for elderly parents, or the prospect of raising children, issues that would affect her investment decisions and portfolio management. “I wanted to feel that the advisers were working with me individually,” says Rhinehart.

As with many investors, Rhinehart’s holdings took a hit in the fourth quarter of 2001. Since working with Barksdale, her portfolio has experienced a return of 5.75%, compared with a return of 2% to 3% three years earlier.

Focused on financing Rhinehart’s retirement, Barksdale advised her to invest about $20,000 in stocks such as Dreamworks (NYSE: DWA), Pixar (NYSE: PXR), and Whole Foods (NASDAQ: WFMI). She then rolled over Rhinehart’s 401(k) funds from a previous employer into an IRA, now valued between $400,000 and $500,000. Barksdale allocated the funds using a model of 70% equity and 30% fixed income, investing in international funds, such as Templeton Foreign Funds, and commodity funds, such as Pimco. She also invested in domestic large-, mid-, and small-cap companies. “Patricia took an overall view of my short-term and long-term retirement plans,” says Rhinehart. “She showed me how I can draw from my money wisely, and she chose stocks that I like. She also explained how, through proper investing, I can maintain my lifestyle.”

Barksdale has provided further counsel in fortifying Rhinehart’s finances. She advises her client to purchase a sound insurance policy and engage in estate planning. Acknowledging that Rhinehart has always been serious about her savings, Barksdale says her goal will be to “continue to help the client grow potential income as much as possible so that when she is ready to draw from it, it can be done right with minimal penalties.”

Barksdale encourages clients like Rhinehart to fully participate in the investment process. “I like to educate them through a portfolio review,” she explains. Regular reviews allow Barksdale and her clients to examine their portfolios and explore specific industries to target. Barksdale has found that female clients especially have too much exposure in one sector. Her advice to investors: Review and rebalance your portfolio at least once a year.

As Rhinehart concentrates on the future development of Organic Soul Marketing, she feels confident about the direction of her portfolio. She asserts: “I have come to

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