1. Brent Brodeski, Savant Capital Management
We learned that while advisors have generally assumed clients act rationally and logically, in reality, even the smartest and most logical clients tend to make decisions with their gut and then validate such decisions with facts — oftentimes misguided or incomplete facts. As result, talking standard deviation and expected returns with clients did not really resonate during the crisis.
We built a tool to show clients that even if markets never recovered, most would be fine as they would still collect interest, dividends and often had enough principal left, even at reduced prices, to live comfortably for a long time. This quelled lots of anxiety and allowed people to stay the course. The crisis made us think differently and reinvent how we would grow and lead our business and enhance our client value proposition. Because of this we still succeeded in growing quite a bit. We managed to get to $3.4 billion today in spite of challenged markets.
2. Ron Carson, Carson Wealth Management Group
Due to the events of 2008, Carson Wealth saw a marked increase in people asking the question, “Do I have enough resources to quit working and maintain asset values throughout my lifetime without negatively impacting my lifestyle?”
One main lessons learned from the market crash in 2008 is the importance of having a holistic, continually updated wealth plan and relying upon it when emotion increasingly affects the decision making process. We have always made wealth planning the cornerstone of the client relationship, but adjustments after 2008 have focused on increasing three key areas for our clients:
1) Trust: an increased emphasis on the importance of planning provides a calm voice in a turbulent time – the advisor-client relationship is about so much more than investment advice.
2) Transparency: a plan is only the beginning. Once a plan is developed, having proactive strategies which the client clearly understands and has direct access to trade notifications, weekly updates and quarterly streams enhances their experience.
3) Accountability: a plan is only good if it is something which creates accountability. By having a plan, maintaining transparency to the investment vehicles and proactively monitoring in line with goals, our clients receive peace of mind.
3. Mag Black-Scott, Beverly Hills Wealth Management
Financial services have changed forever since 2008 and the way we do business is not changing back. Successful advisors and clients have learned to be innovative and identify more quickly what works, and discard what doesn’t. Because we continue to put innovative elements in place for our clients and add value well beyond “beating the markets” on any given day, we are confident that as volatility abounds and regardless of what looms on the horizon, we are ready to protect our clients in any situation.
4. Ryan Wibberley, CIC Wealth Management
We used to believe buy and hold was dead. I vividly remember a client being angry that his portfolio was down around 15% when the Dow lost 50%, and he asked me "why do all advisors talk in terms of percentages and not dollars?" Meaning, if a client has $1 million dollars, and he is down 15%, the client is down $150,000. Clearly, emotions were taking over and simple mathematics were not of concern. After the markets recovered, the client now jokes about how freaked out he was and some of the things he said when his emotions were getting the best of him. I think we learned that managing client expectations is as important as managing client assets.
The key takeaway was that we needed to manage client expectations in a different way. We also learned that clients feel better about their investments, even when they are down, if they can identify with their investments or understand what they own. For example, it's easy for a client to understand their shares of Pepsi, vs. some mutual fund that holds hundreds of stocks. We learned that if a client owns Pepsi, and it's down 20%, they seem to be ok with it more, because they know it's Pepsi. Our portfolios now hold a much higher percentage of high quality individual stocks than ever before. We plan to hold onto these names for the long haul.
5. J.J. Feldman, Miracle Mile Advisors