Page 44 - Investment Advisor April 2021

RETIREMENT PLANNING

wrong and will they be OK if it goes as “The truth is to really be satisfied with Spouses, among other things, must
bad as they imagine it can end up being. your financial choices, you need to fill all agree what they want to leave for their
4. Get clients to control the few three buckets,” he explained. “You need kids. “We need to be aligned about what’s
things they can control. “The most to protect [money] because that’s the pru- it all about” and choose between leaving
important thing that I say to anyone dent thing to do. You need to enjoy because more money for the kids or taking more
when it comes to financial decision- … you don’t know what’s going to happen vacations now, as examples, he said.
making is check your emotions and focus tomorrow and you need to have enough to “The biggest challenge we see is that a
on what you can control,” Duran said. take care of your commitments.” lot of our net wealth is going to be given
“You have no control over what the “Our job first” as advisors “is to to the siblings and to the kids because
dollar does [or] what the stock mar- understand your biases and then second, of … huge sacrifices” that may not have
ket does. You don’t even have been necessary, he noted.
control over really your rate As an investor, “don’t worry 8. Encourage clients to
of return,” he pointed out. chat before the pandemic
However, “what you can con- about what everyone else ends. The COVID-19 pan-
trol is your risk,” he said. does [because] you will never demic is a “polarizing event”
“None of us know what’s that everybody is experienc-
going to happen tomorrow,” he hear from your friends about ing differently, but that is true
said. “What we get paid for” of every major crisis to some
as advisors is “to understand the losses that they had.” degree, according to Duran.
people and then to build a port- Many people are returning
folio that [clients] are going to —Joe Duran to doing the things that really
be able to live with and make matter to them and this is a
appropriate adjustments along the how do we articulate why you work, great opportunity to “reassess what are
way. That’s what a good advisor does. your priorities,” he said. While “every- the things I don’t need to bring back to
They’re helping [clients] to optimize one’s goals are constantly changing,” he my life” after the pandemic is over, he
[their] decision-making.” said “the number one priority across our said. He encouraged people to “take the
Advisors should tell their clients 25,000 clients is … I want to spend time time now before we get back to our hec-
to manage their costs, taxes and risks with people I care about.” tic life to ask yourself what do I not want
because when it comes to investing, Advisors also should make sure when to bring back when the world reopens.”
those are the things they can actually they are making goal adjustments with 9. Encourage clients to prepare for
manage, according to Duran. Beyond clients that they’re in line with the more volatility. There will be more
that: Be diversified, don’t do anything things clients say matter most to them, volatility and clients should be pre-
silly and “don’t make mistakes” that end he said. pared for that, according to Duran.
up in the loss of “substantial amounts of 7. Make sure clients are aligned “There will be overreactions on both
money,” he said. with their significant others. “Our sides [and] the answer is to not react,”
5. Tell clients not to worry about industry is built historically by men for he said. Also, “make sure you’re par-
what others are investing in. As an men and that’s a huge mistake,” accord- ticipating and that your overall risk is
investor, “don’t worry about what every- ing to Duran. All too often, the “non- fine regardless if we go through a 15%
one else does [because] you will never financial spouse” is “often ignored in decline somewhere in the next year,”
hear from your friends about the losses our industry because most of the people he added.
that they had,” Duran said. delivering the advice have been trained “This is a great time to sit with your
6. Learn your clients’ biases and get to focus on money, investing and rate of advisor and [ask] ‘Am I OK if the mar-
them to understand them also. To get return,” he noted. kets fall 20% from here so that you’re
clients to understand their biases, this “But the reality is that the use of the ready,” he suggested. “I call it the life-
quick exercise to figure out what they money is what everybody cares about,” boat drill. How much water is your boat
care about most is useful, Duran noted. he said. Vacations are important, for willing to take on before you say ‘I’ve got
There are three buckets and the goal is instance. How supportive will the non- to get out and start swimming?’”
to figure out which bucket to put money financial spouse be of a financial plan if
into: To protect themselves, take care of she or he has no part in the conversation Jeff Berman can be reached at jberman@
the people they care about, or to enjoy life. with the advisor? alm.com.

42 INVESTMENT ADVISOR APRIL 2021 | ThinkAdvisor.com