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Shaping Financial Plans For Your Clients

By Crucial Clips     March 13, 2019
The following text is a transcript of a portion of a speaker's presentation made at an industry conference or during an interview. This transcript solely represents the view of the individual who spoke, and not the view of Financial Advisor IQ or any other group.
Source: FAIQ, Jun. 28, 2018 

RITA RAAGAS DE RAMOS, SPECIAL PROJECTS MANAGER, FINANCIAL ADVISOR IQ: Hi. I'm Rita Raagas De Ramos from Financial Advisor IQ. And with me is Steven Check, president of Check Capital Management. Could you tell us more about your clients? Are they mostly retail or high net worth clients?

STEVEN CHECK, PRESIDENT, CHECK CAPITAL MANAGEMENT: Our clients are mostly individuals, I'll start with that, so, as opposed to an institutional type of clients. Our average client has about a million dollars under our management, so this is oftentimes a very significant part of their net worth. This is their life savings. But yet, they need to grow that money so that their retirement will work out the way they like to see it work out too, as opposed to just leaving the money in bonds or treasury bills.

RITA RAAGAS DE RAMOS: And how do you shape the financial plan for your clients?

STEVEN CHECK: Well, we really sit down with them and really try to identify, again, what's their short-term money and what's their long-term money. And if we define short-term as say four-year-and-less money, money that they want for living expenses or anything over the next four years, we will put that into what we call our bucket one. And that's where will do a straightforward bond ladder just to make sure that the money is there each year when they want the money or need the money.

Then the longer term money, say the four-year-and-longer money, that's the money that we'll invest in stocks, where we think we'll get the superior growth over time. And the idea of having four years, the stocks will go down on average maybe once every five years. And you want to make sure that you have time for those stocks to come back up and hit new highs and not have to sell stocks, except for at a high. So the bucket one is a short-term spending money, which will cover that period. That'll give you time for the volatility of the market to work both ways, both down and up. And we can just take profits and stocks and always move over to the spending bucket when stocks are at a high.

RITA RAAGAS DE RAMOS: When you're speaking to your clients, especially the ones who are new to your firm, what kind of questions are they asking you with regard to their financial security or financial wellness?

STEVEN CHECK: Well, first of all, they might be asking, do their goals make sense? They might say, "Well, I have this much money, and I want this from my assets, and I want it to last for this many years." And it's our job to do an analysis of that and to give them the answer to that, say, "Yes, your goals are reasonable," or "Your goals are not, and these are the kind of adjustments you should look to make." But then it comes down to, again, just making sure the money is allocated properly for their particular situation. And remember, their situation is different than everybody else's. And it's not as easy as every 65-year-old would have 65% in stocks or bonds or whatever the number might be, it's individual for each client.

RITA RAAGAS DE RAMOS: Do you think that the clients are asking you the right questions? Or do you tend to need to steer them towards the more important priorities?

STEVEN CHECK: Well, I think it's a combination of both. I think, a lot of times, they do come in with the right questions. And then, a lot of times, they might be looking at us and other investment advisors at the same time, and we'll tell them the kind of questions that we think they should ask us and that they should ask anybody else to make sure they're finding the right fit for themselves.

RITA RAAGAS DE RAMOS: Do you think your clients are preparing enough for their future financially?

STEVEN CHECK: Well, in general, I would say they are. By the time they've identified us, I think, they've probably screened out an awful lot of people. But by the time they usually come to us, they usually do have pretty reasonable goals, and they're looking for us to assure them of that, I guess, first of all, and then put into place a plan that will accomplish their goals.

RITA RAAGAS DE RAMOS: Thank you, Steven.

STEVEN CHECK: Thank you, Rita.