If some weeks it feels like your office's reception area is like a battlefield hospital filled with a wounded army of shell-shocked investors vying for your attention, you're not alone. With many portfolios halved by a bear market still flexing its muscles, advisors across the country report an influx of investors are beating a path to their doors, many with ragged portfolios in tow. Not surprisingly, they're looking for any help they can find.

Their goal is to recoup their losses in what feels like a parallel universe where the rules of investing are shifting faster than quicksand.

Aggravating the problem-beyond the free fall that has shrunk stock market performance by more than 40% in the past three years-are investors themselves. "Many are victims of their most recent investment experience," says David Bugen of RegentAtlantic Capital in Chatham, N.J. For many investors the experience shaping their current response has been extreme. In the past decade, some experienced nearly instant wealth only to see it disappear, in some cases even more quickly than it had been produced. Even slow and steady investors were spoiled by the market's exuberance.

Which makes their recent comeuppance that much harder to take. "Boomers' experience has been: If you want to get richer, get a year older," says Milwaukee advisor Paula Hogan of Hogan Financial Management. "House prices went up, stock and bond prices went up, compensation went up, and everything got better. The unspoken rule was you always get bailed out. If the market went down, all you had to do was wait a day. The upside down lesson for many investors is: You don't always get bailed out."

At the same time, many of the investment truisms advisors have used to steer by-bonds are safe, don't time the market, stay the course, even seniors need stocks, wait for the rebound-aren't as true as they once were. The added uncertainty has sent investors scrambling for cover. For some that's meant an irrational return to technology stocks. For others, it's meant an overabundance of cash or an all-bond portfolio, even long-term bonds that expose them to potential losses. But bonds are safe, aren't they?

The good news for advisors is that some investors believe they need capable advice more than ever. Here's how some of the leading planners are using smart products, sound advice, asset allocation and advantageous tax planning to provide a strategy fit for the new reality.

Smart Products If the past three years have been bleak, the next decade is shaping up to be challenging. With the equity risk premium expected to remain lower than normal over the next ten years and long-term bonds poised to be severely undercut if interest rates start to rise, getting on track and trying to recoup losses is critical for most investors.

While most planners are reluctant to say intrinsic long-term fundamentals have changed, "we know that the reward for equity investing has changed," says Bugen, whose firm is projecting stock returns of 7% to 8% and bond returns of 4% to 6% over the next decade. "If we knew how long we were going to live, this would be easy. You don't want to oversave and be miserable now, but you don't want to be broke and old either." That's where innovation comes in. As planners seek out investments with consistent better-than-average returns and lower-than-average volatility, they may want to consider vehicles like the Hennessy Cornerstone Growth Fund. The fund has returned 58% in the past five years, clobbering the S&P's measly 3%. Recent performance has been even better. How does Neil Hennessy, who bought the fund in 1999 from James P. O'Shaughnessy, an adviser and brilliant quantitative analyst, do it? By using a disciplined, computer-based approach to look for stocks that have low price-to-sales (P/S) ratios. "We are formula driven, bound by perspective," Hennessy says. "Sticking with a formula makes you become highly disciplined and nonemotional," the manager says. The fund starts with the 10,000 stocks in the S&P's Compustat base, knocks out those with market caps below $172 million and P/S ratios above 1.5%. Stocks that failed to increase earnings in the previous year are also knocked out. Hennessy uses the formula to find the 50 stocks with the best relative strength over the preceding year, buys them, then repeats the analysis again at the end of the year. Sometimes the entire portfolio turns over, sometimes not.

Stocks in the portfolio include homebuilder NVR Inc., craft chain Michaels Stores and Hovnanian Enterprises, another builder. Hovnanian trades at a P/S ratio of 0.5, despite quadrupling in price this year. NVR was no slouch either. It doubled in 2001 and is up more than 60% year to date. It's the stock-picking system that Hennessy credits for discovering homebuilders.

RegentAtlantic has created its own disciplined equity portfolio for large-cap U.S. stocks that also relies on proprietary quantitative selection. The goal, of course, is to outperform the S&P while minimizing risk. "We're ahead so far," says Chris Cordaro, who oversees investments at the firm.

Cordaro also is on the lookout for fixed-income alternatives without incurring unnecessary risk. One fund the firm is using: Scudder Presentation Plus, which has a 4.5% fixed rate of return, no fluctuation in share price and standard deviation of 1%. The fund is available exclusively for IRA accounts. "Our optimizer likes this fund at lot more than than a bond fund at 5.25% with a standard deviation of 8%," Cordaro says.

RegentAtlantic and other firms are also rethinking annuities and give TIAA-CREF high marks for its fixed annuity offering, which is guaranteeing 4.1% a year and has no early surrender charge. "It's much better than a CD and has complete liquidity," Cordaro adds.

Allocation Allocation Allocation If most investors are experiencing anxiety, retirees and near-retirees are in shock-and with good reason. Seeing your retirement plan assets cut in half is a nerve-wracking experience even for steel-willed clients. While investors' first reaction may be to flee stocks altogether, advisors are using a more disciplined tack. But they admit they've pulled back on equity allocations for older clients.

"If three years ago the mix was 60% equity, 40% fixed, today it's closer to 40% equity and 60% fixed," says Maryland planner Thomas Curtis, a coordinator for the recent FPA Mid-Atlantic Retreat in Cumberland, Md. While most advisors at the FPA Retreat say they would have preferred that prospective clients came in the door before they sustained avoidable losses, planners are rolling up their sleeves to help them now.

Sometimes that means convincing investors to sell assets to which they've developed an emotional attachment. It upends their notion of "buy-and-hold" investing, even when it's the right thing to do. "I just finished working with a 56-year-old and convinced her to redeem two zero-coupon bonds so we could rebalance her portfolio and use the gains to offset significant losses in her stock portfolio," Curtis says.

Hogan's firm is scaling back stock allocations on a relative basis. "We started muffling stock allocation about 18 months to two years ago," Hogan says. "A big move in our firm was to go from 65% stocks to 60% stocks. If they're older, we want them at 55% stocks. We want to create a lifetime stream of income for them," adds the planner, who says her firm is using annuities from DFA, TIAA-CREF and Vanguard to lock in returns for a small percentage of client portfolios. "The goal is to protect them against the risk of living beyond their life expectancy, which half of them will do," Hogan says.

Being tax smart helps, too. To pay for client annuities, Hogan scours client assets for life insurance products that are losing money. "We consider the idea of a tax-free exchange to an an annuity, while using the tax loss to offset income. It's the only way you'll be able to recognize the loss on insurance products, and it's a sound way to minimize gains elsewhere in a portfolio," Hogan says.

Rethinking Retirement Perhaps the best news is that the standard 4% withdrawal rate for retirement assets most planners use will likely hold. "But it won't be any higher than that," predicts RegentAtlantic's Bugen.

So far so good. But making up for already sustained losses has meant some compromises. It's also been a dose of reality for several generations of investors who envisioned early retirement as their God-given right. "A lot of folks are preparing to postpone retirement," he adds. "This week I saw a 57-year-old client who had planned to work until 60. She told me she's prepared now to work until age 62."

Bugen's firm has been busy running a range of investment scenarios for clients. It's a necessary and responsible way of ensuring that they're realistic about their choices and likely outcomes. The options for many are pretty simple: Invest more, spend less, retire later and/or increase your risk exposure. Bugen's firm details both the worst- and best-case scenarios of more aggressive allocations and all other choices the client may want to make. "It's the client's final decision, but it's my job to ask: 'Do you want to retire on less, retire later or give your kids less?'" says Bugen, who maintains that advisors owe it to clients to run all the numbers and analysis necessary to reduce the chances of a surprise going forward.

"The danger," he says, "is for clients to not have a strategy that gives them a reasonable probability for achieving their goals. If their goal is spend $60,000 a year and they have $600,000 in the bank and Social Security to rely on, they have to realize that they may invade principal pretty quickly. Will that really help them sleep better at night? We have to ask."

Save More It sounds like a no-brainer, but many clients need to improve their cash-flow management, if they manage it at all. While any number of planners think convincing clients to think about how they can find more to invest is a task clients should undertake on their own, other advisors are putting a new spin on the chore, even going so far as to use it to bolster their practices.

"I think it's our job to help our clients find the money to invest to meet their goals," says Barbara A. Clark, a principal in Secure Financial Management, Inc. in Ashburn, Va. Client goals and sometimes their investment gaffs were on everyone's mind at the conference, says Roron Wisniewski, Clark's partner.

To ensure all their clients focus on finding more needed investment dollars, Secure Financial is test driving an innovative online cash flow management system called Mvelopes Personal. Instead of being a check register program, Mvelopes helps clients understand the impact their spending has in real time. It also encourages clients by showing them how diligent spending pays off.

"We're thinking about using this for all clients," says Wisniewski. "They'll get to see the rewards of cash management, and it will give them an immediate sense of how their actions impact their goals. At the end of the month, they'll either have missed their mark or be able to see where they've saved money they can invest or earmark for spending goals," he adds.

It's an interesting tool from which one more clients might be able to benefit. Bugen says he just saw the adult children of an existing client who wanted to build a big addition on their house and start saving for retirement and college, but didn't want to cut back on spending.

"I asked them what they were willing to give up, and they agreed to postpone the addition a year, but that was about it," he says.

Prospective clients may show up at your door, hat in hand, but that doesn't mean they'll all be wiser for their travails.