1. Jason Katz, UBS Wealth Management Americas – New York, NY
The financial calamity shook most clients, advisors and investment firms to their core. My biggest takeaway is that when it comes to investing, NOTHING can be taken for granted. My biggest learning moments from the experience were:
- Don't rely solely on what other people say or what has happened historically.
- Every product, regardless of how "safe" it is, has to be personally researched and understood.
- Many clients and advisors don't understand risk until it hits them.
- It is important to define what risk means to you and your clients BEFORE money is put to work.
- Any return over the risk-free rate comes with a trade-off and incremental risk, clients must understand that upfront.
- Having a long term game plan is the ONLY way to weather a crisis.
- Even though there are periods where diversification hasn't worked, over the long run it's the only way to reduce the volatility of returns.
- "Set it and forget it" doesn't work. Clients must strategically rebalance.
2. Ronya Corey, Merrill Lynch Wealth Management -- Washington D.C.
The 2008 financial crisis has served as a reminder to revisit the basics with each individual client to determine their goals and redefine what risk means for them. I focus on making sure that my clients keep their long-term goals in sight, that they do not make rash decisions based only on the current “noise” of the market and the here and now. Although those conversations are important and relevant, each person needs to plan according to their future goals. For example, retirement wishes should be a part of every discussion, and as their advisor, I help push each client to think of the years far beyond today. To successfully accomplish this, I urge my clients to address their asset allocation in terms of risk when we are reviewing their financial plan. We need to discuss their “worst case scenario” to ensure that they can handle the unexpected financial situations that life sometimes hands us. I work closely with each individual to discuss and review the actions they may want to take to ensure that they are best positioned for growth opportunities while appropriately managing risk in today’s environment.
3. Marilyn Littlejohn Schmitz, Raymond James -- St. Petersburg, Fla.
I saw the 2008 crisis as an opportunity to grow my business. Since I started in the securities industry in 1987 after Black Monday, I knew there would be clients who were not being well-served by less experienced advisors who were hiding under their desks. I scheduled monthly client open house forums for the next two years to get in front of clients and referrals. It has paid off extremely well for my practice.
4. Jeff Runyan, Wedbush Securities -- Beverly Hills, Calif.
I’ve learned that investors have short-term memories and that returns in robust times may lure even the most rational minds to depart from intended goals of safety and prudence. I’ve observed that the departure from safety is often due to emotionally exciting market movements. I recall from the financial implosion of 2008 that even investments with perceived safety and certainty can -- in a time of financial crisis -- not be immune to unwelcomed pricing vagaries.
What I’ve done post-crisis is continuously and conscientiously remind clients that while the market may be up, it can easily and rapidly go down. These days, we’re adjusting expectations and more clearly outlining potential declines so it’s not as shocking if the printed value on a statement is less favorable.
5. Rick Ashcroft, Robert W. Baird. & Co. – Houston
Most of our clients are retired and living on their investments, which was also true prior to the crisis. What we noticed in 2008 was that clients who had an investment plan and income strategy that addressed the possibility of periods of very poor performance tolerated the crisis far better than those who didn’t. When people transition to retirement, they often think that working with a professional will largely insulate them from poor results. We have learned to make clear to them that it won’t, but if we plan for disappointments, those episodes need not jeopardize their long-term goals.
6. Rob Brewer, Raymond James -- Lexington, Ky.