Top 40 Under 40: Providing a Complete Financial Package

No. 17: Jack Riley

Firm: Morgan Stanley

AUM: $896.12 million

Location: Morristown, NJ

Age: 36

Note: This profile is part of a special series devoted to On Wall Street’s Top 40 Under 40 ranking for 2012. Every day we take a look at an advisor who made the list to find out the secrets of their success.

Morgan Stanley financial advisor Jack Riley says that serving corporate executive clients is really about providing a complete financial package.

“We bring in other professionals, such as accountants and attorneys. Often, our planning will involve annual meetings with the executive’s entire family,” Riley says.

The financial package ranges from portfolio management to insurance planning and charitable gifts. “All of our clients are different, so they need customized plans,” Riley says. “That’s why we bring in outside professionals, for comprehensive financial advice.” Beyond portfolio management, Riley often helps clients develop their plans for life and long-term care insurance.

Capital preservation is a key goal for Riley’s wealthy clients. “We hold a great deal of fixed income products in clients’ core portfolios,” Riley says. “Fixed-income has done well, providing comfort in some uncertain times.” Low-volatility holdings helped to reduce stress levels in the second half of 2012, Riley notes, when many clients were not sure how they’d be affected by the elections and by the fiscal cliff outcome.

According to Riley, clients were concerned not only about how the political results and maneuvering might affect their personal finances, but also about the impact on the broad economy. “They’re anxious about the burden that future generations might face,” he says.

One way to assure clients in these turbulent times is through prudent investing. “There’s not a whole lot we can do about the political landscape, but we can put together well-balanced portfolios,” Riley says. “Generally, that means staying relatively conservative.”

To uphold a cautious approach, Riley has fine-tuned his approach to fixed income. “Inflation may pick up at some point, if not in the short term,” Riley says. “We’re slowly starting to reduce our duration by selling some bonds that are further out on the yield curve.” Long-term bonds probably will be hardest hit if inflation fears drive up interest rates; shorter-duration bonds will provide more opportunity to reinvest and possibly benefit from higher yields in the future.

Otherwise, Riley says he has generally kept clients’ core portfolios in place with other investments such as ETFs, closed-end funds and separately managed accounts. “Commodities probably will head higher in the next few years, so we want to have some exposure there as well,” Riley says.