This is a time for thought leadership, not idle thinking...A time for new, better ways to protect and grow wealth. The recent financial crisis revealed that relying too heavily on traditional thinking can be limiting at best and life-changing at worst. As a result, we shifted our thinking, because our clients' success is paramount.
Best & Worst Case Scenario: A Simplified Illustration
Bob and John are two retirees. Bob and John don't know each other, but their circumstances at retirement are very similar. They both retired at the age of 60 with $2,000,000. They drew $80,000 per year (adjusted for inflation) from their portfolios to live on and their asset allocations and investment portfolios were exactly the same. John lived happily until his death at age 85, leaving a multi-million dollar estate to heirs and charity. Bob, on the other hand, ran out of money at age 75 and still had plenty more life to live. So why the difference between John's retirement and Bob's retirement? John retired in 1982 and Bob retired in 1999. Timing matters even though the market cannot be timed. Despite very different outcomes, both of their financial plans indicated they would be able to retire comfortably and would most likely not run out of money.
The financial industry relies heavily on decades-old thinking that is showing its age. Common financial plans assume future investment returns will mirror historical returns whether interest rates or stock values are high or low. Many financial advisors still recommend standard stock/bond portfolios, regardless of individual income needs, tax considerations or life circumstances. These standard stock/bond portfolios typically require investors to ride out the ups and downs of the financial markets and don't consider innovative ways to reduce downside risk or capitalize on opportunities outside the markets that can offer additional sources of income that many retirees are looking for.
A New Perspective
The story about Bob and John underscores why we shifted our thinking and subsequently our business. We don't solely rely on traditional industry assumptions to predict whether or not our clients will have enough money to meet their many goals for their lives. We are continually seeking new and better ways to help our clients meet their goals without taking undue risk. We designed our financial planning approach to anticipate and plan for unexpected outcomes, such as a down market at time of retirement. In essence, we combine what we believe to be the most relevant conventional wisdom of our industry with fresh new ideas and investment solutions that provide our clients with stress-tested financial plans, while protecting and enabling their wealth to continue growing under our management. In this way, our clients have choices, room to make adjustments, and continued confidence that they will still get to where they're going in the end.
Everything we do is designed to improve each client's likelihood of success. We focus first on what really matters in our client's life and determine the best way to turn it into reality.