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Advisors Vow to Communicate Better Next Year

By Murray ColemanChris LathamJoan Warner December 29, 2014

Every December, SEI polls a few hundred financial advisors on their New Year’s resolutions. Unfortunately, because it’s a multiple-choice survey, the results tend to look pretty much the same from year to year — with most respondents saying their No. 1 goal is to get more referrals. So we called a handful of our favorite sources and asked them to tell us in their own words what they want to do differently beginning in January.

Not one mentioned prospecting. Instead, they’re promising themselves they’ll do a better job communicating with existing clients. For example, Steven Foldes of Evensky & Katz/Foldes Financial Wealth Management in Coral Gables, Fla., says he and his colleagues expect the stock market to challenge investors’ serenity in 2015. Clients are already calling, wondering whether they should be making portfolio adjustments. So he vows to put extra energy into what he considers every financial advisor’s most valuable role: encouraging clients to stay the course. “With market volatility picking up lately, my resolution for the New Year is to reinforce our message that clients need to remain patient and disciplined in sticking with their long-term financial plans,” says Foldes, whose firm manages $1.6 billion.

Steven Foldes

At Tarbox Group in Newport Beach, Calif., advisor Mark Wilson’s resolution for the New Year is to get clients on board as the firm moves away from actively managed equity funds. The independent RIA, which manages $450 million, has traditionally used a mix of active and passive strategies in clients’ stock allocations. But the combination confuses some clients, according to Wilson, and Tarbox will soon shift nearly 100% into index mutual funds and ETFs for equities. “In 2015, we want to simplify our approach and make it easier for clients to understand where we’re coming from,” he says. Advisors will use client meetings to explain how index funds can improve a portfolio’s tax efficiency, lower overall costs and provide more transparency.

The team at Legend Financial Advisors in Pittsburgh also plans to talk to clients about a shift this year: the implications of approaching retirement. Around 80% of the firm’s customers are over 50, says CEO Lou Stanasolovich, and it’s time to get them thinking realistically about what comes after the asset-accumulation phase. In 2015, therefore, “we’re going to put even more effort into what was already an extraordinary effort,” he says. Legend advisors will gently disabuse clients of the notion that they can live on 70% of their preretirement income, for example. “It’s more like 100% to 120%,” says Stanasolovich, whose firm manages $350 million. His team will start laying out the real-life trade-offs clients will have to make — perhaps taking a big trip every five years instead of every single summer, or working part-time and renting rather than buying a second home.

What Not to Do

New Year’s resolutions are at least as important for clients as for their advisors, in Randy Carver’s opinion. He runs Carver Financial Services in Mentor, Ohio, a Raymond James affiliate that manages $940 million. Most people procrastinate about getting an estate plan going, so that’s one area where he thinks clients should try to get their act together in 2015. Another is making sure their portfolio allocations still match their long-term financial objectives.

Some planning professionals will seek self-improvement by doing less next year. Michael Kitces belongs to this crowd. A partner at Pinnacle Advisory Group, Kitces also writes prolifically in his Nerd’s Eye View blog; is scheduled to speak at 28 events in 2015; consults to other advisors; and comanages two planner-recruiting websites, one a recent launch aimed at helping RIAs find junior advisors. “My goal is to kick off the year with a list of things I will STOP doing,” Kitces writes in an e-mail to FA-IQ. So far, his targets include “saying no to more speaking engagements, limiting some of my writing duties and delegating to staff a number of new tasks that I need to stop doing myself.” Cutting back on these activities, Kitces says, “will allow me to focus more effectively on the things that are left.”