When Mowry Young, senior vice president at Wealthcare, a financial services company based in Richmond, Va., walked into the home of one couple who are clients, he saw an old-fashioned green paper ledger and a sharpened pencil lying on the kitchen counter.
The couple had meticulously kept monthly track of their past portfolio returns for years.
What they did not realize was they were sitting on enough money to realize their retirement goals, because they were looking to the past instead of planning their future, said Young. He proceeded over the years to show them how they could build a home in a better neighborhood in Ohio, and eventually build a second home in Florida, by reorganizing their priorities.
“Too many advisors are measuring the past with their clients instead of looking to the future using probabilities and possibilities,” Young said. “These advisors think their role as a money manager is what adds value for their clients.”
Instead, advisors should be helping their clients utilize and maximize what they have so they can do what they really want, he said.
“The couple who had been keeping meticulous track of their returns would have died with a big portfolio,” Young said. Instead, they got rid of the ledger and pencil and used the money they had worked for.
Young said he switched from a commission business to a fee-based business and now gets new clients through referrals. He has grown with Wealthcare from $100 million in AUM to more than $250 million.
Another retiring couple came to Young just before the 2008 financial crisis with a portfolio that seemed healthy, but their advisor had not been working with them to sustain the portfolio through a crisis, concentrating instead on current returns.
Young said he took them through the crisis using a minimum of risk and without trying to time the market. He then helped them rearrange their priorities for spending.
“What they really wanted was to spend less on socializing and use that money to visit family in other states,” he said.