Planning the Fiscal Future
Keeping the “personal” in personal investment
Photos by Charlie Neuenschwander
There’s a big difference between wealth management, financial advisement and retirement planning. One doesn’t necessarily need the assets of J.R. Ewing to warrant a financial planner, but sometimes it helps.
According to the experts, wealth management is for high net worth individuals. Financial planning, on the other hand, is what most people will need at some point in their lives. Likewise, retirement planning has become a big part of financial planning, since people are living longer into their retirement years.
“Most people are going to fall into the financial planning category,” says Doug Garone, a financial adviser with Edward Jones Company. “That primarily involves working with middle-class families to save for their kids’ college, perhaps saving for retirement or simply putting together a family budget. Whatever your wealth situation is, we can help with a plan of action.”
It’s important, Garone said, to work closely with his clients to help understand what’s important to them and what their goals are.
“We have an established process at Edward Jones to work with our clients and basically partner with them to determine their best investment strategy,” he says. “That means sitting down with them one-on-one to find out what their goals are and how we can help them achieve those goals. Usually someone will already have a goal in mind. Maybe they’re saving for … a daughter’s wedding. Is there a medical need? Perhaps they want to travel or do some home renovations. Finding out their goal and what they have saved now is a primary starting point for us.”
Edward Jones has been around since 1922, and Garone said the company serves nearly 7 million investors from more offices than any other investment firm in the country. And one important thing to remember is that it is never too late to start planning for the future.
“All the models and all the reports you see out there, of course, will show the benefits of early investing,” he says. “But in my opinion – and I think every financial adviser would agree with me – it’s never too late to start some kind of investment strategy.”
Garone quoted financier Warren Buffett, saying he believes in his strategy of holding investments for the long term.
“Basically, Warren Buffett says his favorite holding period is forever,” Garone says. “And I think that would be one of the top recommendations I would give: Plan to stay in it as long as possible. During the housing bust of 2007, many people saw their portfolio at that time take a significant loss in value, and may have opted to close out their plans or stop contributing to their employers’ 401k, and, to me, that just goes against the philosophy that we are in it for the long haul.”
The old cliché about not putting all your eggs in one basket is true for investing, Garone added, and he advises clients to diversify when they can. He also believes in a new trend that has become known as “rebalancing.”
“That has become extremely important over the last several years,” he says. “In other words, if you’ve been a moderately conservative investor in the past, but maybe you’ve had a promotion at your job, or received an inheritance or settlement, or some other large sum of funds, you may now want to become a little more of an aggressive investor. When you look at your portfolio you designed 15 years ago, you might see it is much more conservative than where you are today. So, it may be wise to come back in and let us take a look and re-balance that portfolio.”
When it comes to investing, there’s really no such thing as a safe bet, Garone said, other than taking all your money and putting it into gold bars – and that is not something he recommends. But the bottom line is to find a financial adviser with whom you are comfortable, and trust them to guide you along the way.
“I look at life and investing sort of like a roller coaster ride,” Garone says. “There will be ups and downs, and as your adviser, we are there with you keeping you within the parameters, making sure you are safe and protected.”
Another piece of advice comes from Fred Mischler, a financial adviser with Waddell & Reed. These days, advertisements for do-it-yourself investment solutions are everywhere. But in the long run, it pays to have an experienced adviser on your side.
“While most of us know the basics of saving and investing, not all of us have the time to plan,” Mischler says. “I believe that’s where my clients find value in having a financial adviser. Doing it alone can become daunting and frustrating; having someone who has experience with the process can be helpful.”
Mischler has more than 30 years of experience as a tax consultant, attorney and financial analyst. He, too, firmly believes in spending the amount of time necessary to listen to and understand his clients’ needs and goals, and then helping them design an appropriate financial plan to help them reach those goals.
“I seek to be the personal ‘CFO’ for each of my clients, advising them on how to pursue their financial goals, and insure their lives, their families and their assets,” he says. “My job as a financial adviser is to be familiar with my clients’ needs, whether a secure retirement, saving for a college education, building wealth – the approach should be decidedly personal.”
Recommending and providing investments in stocks, bonds, mutual funds, life insurance and annuities is how Mischler helps his clients achieve their goals. And while there are a number of organizations and financial advisers available, he said it’s important to choose the right one.
“The majority of my clients are referral-based,” he says. “I feel that taking a personal approach and making a connection with your adviser is key. Attitudes, values and outlook can also be important ways to connect with anyone, and that is no less important here at Waddell & Reed. I believe that in life, a plan is important – and having someone to stand by you to support you is just as important.”