The end of a year is always a good time to reflect upon the value that we as advisors bring to our clients. 2009 will certainly have its own set of challenges, but with this current bear market, helping our clients maintain their sanity has to be one of the most important items on our agenda.
With this in mind, I'd like to elaborate a bit on a recent meeting I had with a client.
He had just transferred his accounts to me and was positioned fairly aggressively. He was also, understandably nervous as he watched the markets fall during the transfer process. In September we completed a financial plan which confirmed that he is in great shape. However, this was before October and he wasn't sure if he would still be able to meet his goals. So we update his plan. We entered the reduced portfolio value, added additional risk (standard deviation) to stress test it, and ran 1,000 trials with Monte Carlo simulation. The result? We reconfirmed that even though he has lost money, he should still reach his goals with little trouble. This gave him peace of mind and he mentally checked his portfolio off his list of concerns. Now, that's not to say he doesn't care, but he is no longer worried. That's priceless in my view as this is really what clients are looking for us to provide.
New Office and Maybe New Planning Software
