Knowing Client Risk to Weather Choppy Markets

Choppy and volatile markets and the inevitable fear of a global economic slowdown are major ingredients for guiding investors during tough times. These are the raw characteristics that more and more financial experts use to identify client risk.

Kevin A. Brown CLU, ChFC, owner of Gateway Financial Advisors, Albuquerque, N.M., seeks to make those two qualities true of the relationships he has with the firm’s clients.

“People today are more conservative than they used to be. So many of them got hit really hard in 2008, and even though that was seven years ago, they keep reliving it over and over again,” Brown said. “They want their money to grow, of course, but they also want to be careful as well.”

He takes those investing sentiments to the heart of his clients’ portfolios, where their true ability to emotionally and psychologically handle risk is expressed. Brown said that his firm focuses on each client’s tolerance for the bumpy ride of today’s volatile markets. That guides the types of equity investments and the ratio of stocks to bonds he chooses for his clients. Brown works with various managers, each of whom are specialists in differing degrees of risk. For his more jittery clients who do not handle stormy markets well, Brown has a principal overlay protection plan that gives him an indication of when and where to pull back on equity exposure.

Yet, he recognizes that prudent investors cannot react to every movement in the market.

“Not getting caught up in the price of oil, the China thing or what Vladimir Putin had for breakfast that morning are all things that smart investors look past,” he said. “Letting long-term goals guide decision-making is the best.”

His greatest success is also grounded in building client relationships by acknowledging that his clients aren’t interested in a relationship with the name behind whatever products suit their investing needs. They are most interested in the relationship they have with him.

“They do not buy the name of the company even when you are at a big name company,” Brown said. “The company name, the products, the manager – those are just tools just like a hammer, drill and nail. The client wants a real relationship with a real person. That is what has become illuminated for me after starting my own practice.”

For more information visit:

Follow Us

Subscribe to Our Newsletter

What's Next, Updates & Editorial Picks In Your Inbox

Related Articles

© 2017-2019 Advisors Magazine. All Rights Reserved.Design & Development by The Web Empire