​Building Client Portfolios: Targeting Risk Appropriate Returns

April 29, 2015

As Financial Planners, we have a fiduciary responsibility to “Know Thy Client”. I believe that we are paid to build a financial plan that addresses our clients' concerns, blending in a recipe of tax efficient strategies and investment allocation recommendations that act as financial training wheels to keep them on the right path.

A major constraint is getting clients to understand there is a difference between financial planning and investing. Since I don’t know what the future will be, the plan that is prepared needs to be one that has the ability to achieve the clients’ goals regardless of what horrific storm or catastrophic event arises along the way. If the client is not comfortable with the plan, no interim level of investing success is going to be the medicine that allows them to sleep peacefully at night.

It is our belief, that most “millionaires next door” are willing to accept slower, steadier returns than aggressive, more volatile performances – staying near the middle of the road for safety and allowing them to continue to drive along their route even during a storm. If they do not buy into the plan, believing that it is truly proper for them, they are more apt to jump ship or take detours that ultimately are not in their best interest...

Watch his complete presentation here!