We're looking at rebalancing software. We're looking at online client portals as a place to put all of their stuff. It would eliminate e-mail and cut down on mailing costs, and would make it easier and quicker to send information to them. I've learned how to put some of my communication on my podcast and Webcast.

Dan Moisand, principal at Moisand Fitzgerald Tamayo LLC, Melbourne, Fla.
Amid the turmoil, we revisited every angle, assumption, philosophy, process and management issue we could. One of the glaring lessons is that many of the often-heard pieces of advice regarding practice management are spot-on and really showed their value in adverse environments. Some are repeated so often they can be seen as clichés, such as choosing clients carefully, doing what you say you will do and not making promises you can't keep.

Others include keeping a close eye on your financials and key economic drivers, making sure that firm leaders are on the same page-and that financial planning is key to making good decisions for clients, all firm personnel and the firm as a whole. And managing expectations is at least as important as managing money-both the clients' expectations and the firm's.

We found out we did a good job setting expectations for our clients. Formulating a game plan for a simulated decline is smart but we think clients can be better prepared for making real-time decisions during an actual decline when we add to our processes some coaching on the media's influences on them and their friends. We have plenty of material from the panic of 2008 to remind people what it was like.

We'll also look at a number of different ways to communicate performance. We like using internal rate of return because that's what people ultimately have to eat with. We are considering issuing "special reports" to illustrate timely concepts such as the rebalancing we did. Sticking to our discipline has paid off for clients and we should show that.

I think as an industry we're relearning lessons we already knew, and if you paid attention to them beforehand, you're probably in good shape now. But one concern I have from what I've been hearing are all of these suggestions about things we should be doing differently. You should certainly review your process, but you should be cautious about big changes.

The premise for making changes is that the pillars of traditional investment management--buy-and-hold, diversification, asset allocation--failed during the panic of 2008. I don't hear anything behind that accusation other than the fact that values declined. When you look at the alternatives being suggested, their values declined too. Hedge funds designed to provide absolute returns lost money. Everything went down.

Before the crisis hit, whatever your investment philosophy was is what you chose over other alternatives. With everything else basically failing, to say that the decline [of traditional investment methods] means failure borders on lack of discipline. Don't tell me that traditional methods failed and then offer me an alternative way that stunk worse and still has the negative qualities that caused us to reject it in the first place.

I wonder if advisors' own fears made them capitulate to their clients' anxieties. I have concerns about that based on some knee-jerk reactions I'm hearing. Clients need us to be rational and disciplined. The last thing clients need in a time of crisis is a panicked advisor.

Michael Dubis, certified financial planner, Madison, Wis.
The two things I learned through the crisis were discovering my niche and why I'm really on my clients' payroll.

First « 1 2 3 4 5 6 » Next