Clients
Most clients
are families of average means who want better results from their
investments. They want to make their money grow, or they want reliable
income during retirement. They want to adhere to an overall
organized investment strategy that works while leaving room to safely experiment
for high-potential returns. And they have a clear sense of wanting
to take control rather than trusting their financial future to large
institutions.
Over time I have learned what
characterizes clients who are most comfortable with me and most
appreciative of the returns I provide, which is what makes my job
satisfying.
1.
Clients
realize that most wealth comes from wealth and they want
to put their money to work for them. While we may not think it fair
how the rich get richer and the poor get poorer, until the rules of
wealth distribution are changed, we need to take advantage of how
the system works. By contrast, most financial planners are engaged
to preserve wealth more than to create wealth. They like clients
who already have enough money and can pay bigger fees, who rarely
leave even if performance is poor. My clients are usually more
anxious about missing opportunities than about temporary dips in
valuation.
2.
Clients are encouraged to set their own asset allocation. For some clients I manage most of their
investment assets. Others have placed a small portion with
Wenzel Analytics and I don't know their net worth.
3. Clients are
comfortable delegating. They may be or have been in
management or own their own business or consulting practice. Some
are comfortable delegating just because they have no interest in
dealing with financial and investment decisions. Whether they know
a lot about investing or very little, a lot about me or very little,
they decide to delegate this responsibility to Wenzel Analytics and
then are comfortable with the decision. They are not anxious. If
they need information, they usually read my reports, read their
brokerage statements or visit the brokerage web site. Some welcome
a quarterly meeting while most do not. They know how to manage
accountability without micromanaging.
4.
Clients trust
a single-person practice to work on their behalf more
than they trust a large financial institution and its employees.
One client was with brokerage for years before realizing that
returns did not match the market. Upon leaving, the broker said
that an independent could never match returns because of their
access to inside information. It clearly hasn't worked out
that way. Another didn’t know that an advisor had sold him an annuity until six months later when I
asked about it on his statement. Another was surprised to find an
annual fee of $500 from an insurance company for a guaranteed return
provision. By asking, he also found an $8,000 penalty if he moved
his assets too soon. Clients believe that the illegalities
identified in the mutual fund industry pale beside the scandals of
hidden fees and business as usual. Clients are suspect of
relationships where there are multiple levels exacting a fee, such
as for wrap accounts and subordinate money managers of mutual funds
or private accounts.
Clients and prospects are often concerned about what they would do
if something happened to me. Since their funds are held by
their broker, nothing happens to their funds if something happens to
me. As for the management of accounts, I have a succession
agreement with another money management firm that I respect.
If I were to suddenly die or be incompetent, they would immediately
contact each client and offer their services. Clients would be
free to accept that offer or find alternatives, similarly to when
they first became clients of Wenzel Analytics.
I
struggle to not become overly protective of my clients. It angers
me when I see clients come under the persuasive influence of someone
that I don’t think works in their best interest. As markets go up
and down, it bothered me when a couple clients chose to get off at
the bottom – hurting both their financial future and my performance
record. The history in this country is that equities return
almost
10% while the average investor gets about 3% because of fees and
because of buying high, then selling scared when things are low.