Finance

Bucking Trends and Building Trust

Kimberly Foss, president of Empyrion Wealth Management, Inc., knew she wanted to be in finance when, at eleven years old, she learned a hard lesson about how capitalism works when she could only dream about ditching hand-me-downs in favor of a new pair of designer jeans. Starting in the financial industry right out of school, now, nearly three decades later, she has never looked back.

As a female who’s been through divorce, single parenting and remarriage, Foss understands the conflicts women face in their efforts to build and sustain wealth. Her professional and personal life experiences have made helping women, pre-retirees and family stewards a natural niche. “They’ve gravitated towards us,” she said. “Those are the clients we are looking for and have expertise in helping.”

With a less than 1 percent attrition rate, Foss believes that it’s more than just her experience that keeps her clients happy – it’s their experience as clients that matter. To Foss, that means uncompromising service, reliability and responsiveness, seven days a week.

“Everyone says they are service-oriented. Well, we are,” Foss said, adding that her reputation for rapid response times has led to clients jokingly saying that they won’t ask questions on the weekend because they know she’ll respond right away.

Weekend or not, Foss is adamant that every inquiry deserves a response. “The idea behind that is, if you answer them, acknowledge that you’ve received their question and will get back to them with a specific answer soon, they stop worrying,” Foss said. “And when they stop worrying, it builds trust.”

More importantly, she added that, when clients have to spend time worrying about something going on in their portfolios, they can easily begin imagining scenarios that soon become harder to dispel. “You have to rewrite the story they’ve already written, and that’s a negative,” Foss said. By acknowledging them and assuring them everything is fine, they don’t need to make their own assumptions while waiting for an answer.

“You are also involving the client, and they feel like they are a part of it,” Foss added. “You aren’t just telling them what to do, so they are going to feel much more comfortable. Obviously, tell them what the truth is, and then tell them what the solution is as well.”

Having the confidence that comes through communication is even more important during times of volatility like we are seeing now. Although there are some unknowns, Foss said, “It’s still our job to give them some responsibility to give them direction. It’s really important that advisors educate their clients to control the things that they can control.”

One such variable is risk, which is why it’s so important to utilize strategy and structure portfolios to control risk to get the best returns. “Risk and reward are related,” Foss said. “Diversification is your friend. The structure of the portfolio determines the volatility.”

By following a more conservative and income-driven approach, Foss helps her clients meet their financial goals without succumbing to trends. “I don’t agree that it’s all about beta and gamma,” she said. “We are building income for our clients, which is very difficult in this environment. We try to minimize the noise so that we can increase the rate of return. In our case, we are not really identifying or trying to seek alpha.”

In today’s post-recession market, Foss cautioned that “business as usual” in the financial sector does not exist. Trying to predict rates of return or the effects of what the Feds will or won’t do is no longer a viable strategy. “Volatility is here to stay,” she said.

“But, you can control the risk structure of your portfolio,” Foss explained, adding that those with abundant wealth continually prove that the key to success in the market is to stay in it for the long-term.
While time is an asset when it comes to building wealth on Wall Street, it’s a liability when it comes to healthcare expenses. As people need to plan and sustain longer retirements, healthcare costs have become the biggest threat to asset-based incomes.

“This is a big problem. Healthcare is the number one expense that my aging clients really are concerned about, and I’ve seen that eat away from their retirement plans,” Foss said.
“We help our clients save their capital for the long term. We quantify the terminal net worth that they have and better assess what the real rate of return is that they need.”

As retirements become longer, it becomes harder to save enough to last upwards of thirty years. Foss believes that this, combined with advances in healthcare, will make it likely that we’ll see retirement ages creep as high as 75 within the next decade.

For Foss, embracing the future of financial planning also includes understanding technology and the fact that the millennials who’ve been raised on it are now driving a demand for new technological integrations within the financial sector.

Roboadvisors are one example of a segue tool the next generation has turned to when beginning to build portfolios. While Foss understands the attraction of roboadvisors, she also sees their limitations. “Unless the human element is taken out of capitalism completely, there’s always going to a place for an advisor,” she said. 

“Algorithms are fine, and that is what roboadvisors use, but algorithms lack value judgment and they lack human judgment. This market has human elements to it.” It’s the human side – the experience, judgment, relationships and confidence-building communication – that only an advisor like Foss can bring to the equation.

For more information visit: www.empyrionwealth.com

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