Financial advisers are a grateful tribe, and one thing they all agree on as the nation counts down to Thanksgiving is that clients rank high on their list of blessings.
“More than anything, I am thankful that over the last couple years, our clients didn't panic,” said Bill Thonn, president and chief executive of Whitnell & Co. of Oak Brook, Ill., which manages $840 million in client assets. “They stuck with us and with the strategies we put together for them.”
Mr. Thonn's clients weren't immune to the severe economic
recession. But because they had faith in his planning acumen, they made out better than most, he said.
Karen Altfest of New York-based Altfest Personal Wealth Management, which manages $650 million in assets, communicated “very frequently” with her clients in 2008 and 2009, and is grateful that they stayed the course she set.
“A lot of people who used to come in irregularly to meet felt the need to be in a room with us,” said Ms. Altfest, a principal of the firm along with her husband, Lewis, who founded it 25 years ago.
The fact that U.S. equity markets have climbed from their March 2009 lows is a source of great relief and gives advisers a chance to coax clients back into strategies with a highter return. The S&P 500, for example, was up 40% for the 12-month period through Nov. 12. The index re-turned 23% in 2009 and lost 38% in 2008.
“I'm thankful that the markets have come back enough so that people aren't operating in a pure fear environment,” said Rick Bloom, a principal at of Bloom Asset Management Inc. in Farmington Hills, Mich. The improvement eases the pressure on him and his staff, said Mr. Bloom, whose firm manages $800 million in assets.
Harold Evensky, president and principal of Coral Gables, Fla.-based Evensky & Katz LLC, agrees. Having weathered the tumultuous period, his clients have a greater appreciation of the value that financial advisers bring to the process, he said.
“It's gotten to the point where advisers are recognized as a valuable asset,” said Mr. Evensky, whose firm manages $650 million in assets.
In Nashville, Tenn., financial advisers are thankful they didn't float away. The city known best for its country music was flooded by two days of torrential downpours in May that raised the Cumberland River to more than 13 feet above flood stage and caused $1 billion in damage and 30 deaths.
“Tennessee is the Volunteer State, and our community lived up to that,” said Keith Newcomb, founder and sole financial planner at Nashville-based Full Life Financial LLC. “I am thankful for the volunteer spirit.”
The tragic flood taught Mr. Newcomb that a business continuity plan is useless if it requires a firm to move to its off-site location via one of the three interstates — since high water closed all three. “That was something I had never considered,” he said.
When asked to reflect on what they aren't grateful for this Thanksgiving, advisers' thoughts turned to the nation's capital.
Richard Van Der Noord, owner of Greer, S.C.-based Van Der Noord Financial Advisors Inc., wishes the Securities and Exchange Commission's efforts to make advisory brochure information easier for the public to understand weren't costing him so much.
His law firm, which has charged him $500 a year to prepare the annual ADV Part 2 renewal documents the agency requires,will now charge him between $3,500 and $17,000 to prepare the new “plain English” version that will come into effect for most advisers by March. The fee will depend on the lead time he gives the law firm.
Mr. Van Der Noord said he found other lawyers to complete the form for about $1,100, but that still more than doubles the expense to his firm, which manages about $50 million in assets.
For Mr. Thonn, the Federal Reserve's move this month to buy $600 billion in U.S. Treasuries in an effort to boost employment and tamp inflation is worrisome.
“I am very concerned about the quantitative easing,” he said. “The move towards more government involvement in our business is well-intended, but I am not sure they've done a good job at thinking of all the long-term implications.”
Mr. Evensky worries about the implementation of the 2,300-page Dodd-Frank reform legislation, fearing that the SEC's review of the “fiduciary standard” will lessen its significance.
“I fear they'll end up redefining fiduciary to something meaningless and lower than what has existed for 70 years,” he said.
It is the unresolved estate tax issue that troubles Ms. Altfest.
“I hope there is a resolution soon and that it doesn't come out looking like a turducken,” she said, referring the dish in which a deboned chicken is inclosed in a deboned duck, which is then inserted into a deboned turkey . “With the various components all jammed together, it makes a confusing package.”
