Plan and Prepare

dockWe recently sent our clients an e-mail/letter asking for one thing we could do to make our advisory relationship more valuable. This communication was purposefully the very first item we sent out in 2015. We want to make certain that everything we do traces back to increasing the value that we deliver to each client.

Behavioral Counsel & Coaching

One of the most substantial ways we add value is by helping clients stay on plan. That is, avoiding missteps and emotional based financial decisions. Other concrete items include improving savings behavior and reducing the cost of making complex choices. Over the past few years, there have been several studies highlighting the specific functions provided by independent advisors like us and the value of each activity. Most of the research professes that the most critical component of our work is what the studies term “behavioral counsel and coaching”.

Sometimes “behavioral counsel and coaching” can be focused on helping clients circumvent tendencies that can lead to them chasing returns, moving in and out of markets or trying to always find the “best investment”. Client interventions in relatively good times are far easier than in periods of emotionally charged uncertainty. Since a synonym of “plan” is “prepare”, we encourage everyone to sketch out mentally what they will feel like when the inevitable market correction happens. We are not predicting when, of course, but it will occur.

Visualize the Ledge

Advance preparation is the key to being able to “ride out the storm” and avoid panic selling. The best way for us to have fewer clients perched on the ledge is to visualize what the ledge looks like today, when everything (save the cascade of news events) is calm. We are solely focused on long-term client outcomes, which is much different than short-term investment returns. Author James Grant says” successful investing is about having people agree with you…later”.

Your decision-making mechanisms need to work under conditions of uncertainty. This is precisely where we come in…to help steady the ship and keep the compass heading towards your long-term goals. The broad stock market is up about 70% of the time. How you respond to the other 30% determines your financial future. Now is the time to run the “fire drill” so you will reduce your anxiety and be prepared. Ready for a real conversation?

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