knowledge for the sophisticated advisor

Ironically , the 2020 pandemic may have accelerated RIAs ’ business and broadened d their potential pool of talent and clients .

ABC Company Financial Advisor magazine July / August 2021

July / August 2021 • www . fa-mag . com

Cybersecurity Threats To Family Offices Surge

Sophisticated hackers target the ultra-rich .

Investors Look Abroad

For Value

Could the next decade see better returns offshore ?

Real Estate Shakes Off Covid-19

2020 was a double-edged sword for real estate .

knowledge for the sophisticated advisor

A market upswing helped save this industry in 2020 and recruiting kept its pace .

knowledge for the sophisticated advisor

Chloé A . Moore , Founder and Principal of Financial Staples in Atlanta .

April 2021 • www . fa-mag . com

Tech Stack headaches So much new software . How do you get it to play with legacy systems ?

After The Corona-Crash Have we learned our lessons about investing in a crisis yet ?

hybrid LTC To The Rescue ? as long-term-care insurance struggles , hybrid products add flexibility .

ABC Company Financial

Advisor magazine May 2021

May 2021 • www . fa-mag . com

College Savings Pros And Cons

A post-pandemic assessment on changing views .

How One Advisor Helped ESG Bloom In Texas

Issues like climate change have come to the Lone Star State .

The Value Resurgence : Persistent Or Transitory ? Inflation and interest rates will reveal the outcome .

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IBds navigate The Pandemic

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young professionals sionals are dealing with a different world than their predecessors . Covid only accelerated that .

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their kids , it is often not as big an issue because the kids generally have a time horizon long enough to recover . A client with a set dollar amount in mind for charity may not have that luxury .

Again , a bucket approach can let you determine which assets you wish to use to pay the volatility fee . It is much better to prepare for what is going to be happening than try to play prophet and predict it . We walk with clients during these times . That ’ s why they pay us .

Planners , of course , face a quadruple whammy : Our clients may be unsettled , the value of our personal portfolios might drop , our income may drop , and the value of our businesses may drop . ( I think I just made myself anxious !) But really , this is a time when you want to increase your outreach and service .

New business often doesn ’ t come during times like this because unhappy investors may feel paralyzed . But once people get through the trouble , the client churn is virtually guaranteed . The best way to benefit is by delivering incredible service now . You may suffer shrinking margins by keeping staff , but during difficult times the clients need more of you , not less .

Also , it can ’ t be overstated that you need to manage your own stress during these periods . If you are feeling anxious , it will impact the advice you give .

One of Housel ’ s most important points is , “ Wealth is financial assets that haven ’ t been converted into the stuff you see .” Living large doesn ’ t mean we are wealthy , it simply means we are spending our income or investments . Buying a luxury car doesn ’ t mean we are wealthy , it means that we have less wealth than before we bought the car .

Many of our clients will ask why their neighbor can do something they can ’ t do . It often involves choices , not wealth . We don ’ t know their neighbor ’ s situation or how they choose to spend or invest .

Housel goes on to write that , “ Modern capitalism is a pro at two things : generating wealth and generating envy .” I think this speaks to us as planners .

In our society , it ’ s easy to compare ourselves to others . Unfortunately , that can be a problem for financial advisors too : In a May 16 , 2022 , article on the Nerd ’ s Eye View blog , Michael Kitces and co-author Meghaan Lurtz suggest “ there is a small but clear pattern in which advisors ’ self-worth declines as the net worth of their clients grow [ s ], with a steep drop-off coming as clients surpass $ 2.5 million in net worth .” When advisors can clearly see someone ’ s financial situation , according to this research , it impacts how they feel about their own lives .

True wealth comes from wanting what we have . So what are the steps we can take to want what we have ? The most effective thing to do is be of service to others . When we focus on helping others get what they want , eventually we get what we want .

Another thing we can do is be happy for others . One of the things I meditate on is sympathetic joy . How can I be happy for good things that others experience ? I know that I am not always the model for this .

When I read about someone selling their business to private equity , even though our firm consciously doesn ’ t engage in those discussions ( because we wish to remain independent ), there is a piece of me that is envious . But our businesses are not zero-sum games . Someone else ’ s success does not detract from my own .

This is true with clients as well . Even if someone who is interviewing to become a client of our firm chooses to go with another one , if I focus on that person ’ s happiness rather than my loss , I will feel better .

OK , The Wealth Management Index is not one of the greatest financial planning books ever written , but Morgan Housel ’ s book is . Save yourself some money and just buy his book . Mine is out of print anyway .

Ross Levin is co-founder of Accredited Investors Wealth Management in Edina , Minn .

22 | fInAncIAl AdvIsor MAgAzInE | july / August 2022 WWW . fA-MAg . coM