Wins Over Short-Term Financial Gains.

Several recent surveys by organizations monitoring the pulse of the financial services industry are demonstrating that clients/investors seek a strong relationship with their advisor over market performance. They want a human touch when it comes to handling their finances; they want someone to talk to about their money and how it relates to their future.

That’s not exactly a news flash for Marvin Mitchell, CEO and president of Compass Financial Solutions, LLC, based in St. Louis, Mo. But it's a fact he likes to hear, as it is how he conducts business with the clients served by his firm.

“One of the things we do really well is that we enjoy spending time with our clients and we really have fun with them along with helping guide their financial decisions,” Mitchell said. The firm sponsors more than 70 educational seminars per year as well as regular social functions, ranging from attending baseball games, to paint night events, to tasting events. “We build relationships that go past the money. We want to have fun with our clients and we want them to have fun with us. It is all about building that relationship.”

Mitchell knows that some folks struggle in making any connection between financial advising and a fun relationship, but for him, doing so is a major part of his success. He maintains an open door policy, and he believes that is the kind of service his clients deserve.

“Relationships have everything to do with finances,” he said. “I want our clients to be so comfortable that they don’t hesitate to give our office a call anytime they have a concern.”
He doesn’t bill clients extra for those phone calls, either. He thinks the practice of billing for phone calls – sometimes to the tune of $100 per hour – is ridiculous and poor treatment of clients.

His staff gets the same preferential treatment.

“We treat our staff the same way we treat our clients. Relationships with them are also important. We keep them fresh so they can return that same treatment to the clients,” Mitchell said.

Working as a fiduciary is a valued part of his daily routine.

Mitchell started his financial services career, “drinking the Kool-Aid of Wall Street,” as he describes. But soon his conscience won out as he realized that much of what he sold was in the best interest of the company and not the client.

“The crash of 2008 opened my eyes to a different strategy for helping clients,” he said. “Before, I was telling my clients all of the corporate lines, ‘Hang in there; it is only a paper loss; you only lost 20 percent, others lost 40; you are diversified,’ but I found out that buy and hold does not work. The crash of 2008 made me a better financial advisor because I realized that the same old financial jargon, the same old conventional wisdom was not going to work in this new generation. It was not going to protect people.”
Today, he works with clients who have a minimum of $100,000 in investable assets and he sticks to three simple rules.

First: Protect the client’s principal.

“Clients want to keep their money safe,” Mitchell explained, adding that they also want to make sure they won’t run out.

Second: Deliver a reasonable rate of return.

“Our clients want a reasonable rate of return to keep up with inflation. They are not trying to hit a home run,” he emphasized. “They are not interested in 20 or 30 percent expected returns that also come along with the potential of 50 percent losses.”

Third: Keep it simple.

“We never talk in industry jargon. You will never hear words like ‘alpha’ or ‘beta’ or ‘gamma’ come out of my mouth while talking to clients. It isn’t something my clients want to hear or that they want me to focus on. We just keep it simple and easy to understand.”

Mitchell knows first-hand the devastation that can occur when someone receives inappropriate financial advice. While in college, his grandmother became ill and took bad advice to invest the value of her 401(k) in aggressive stocks. She ran out of money, and family members – including himself – had to come forward to help. At that time, he was studying law, but his interest in finance took over as he became determined to prevent the same fate his grandmother endured from happening to others.

Unfortunately, Mitchell said that he sees the same mistake happening in the financial services world. He believes too many advisors continue the investments of baby boomers in the same manner as they handle the investments of millennials. “Baby boomers just do not have the time to make up losses,” he said. “They need to be protected.”
For Mitchell’s clients, that protection means keeping a portion of their investments in passive strategies as well as in guaranteed income products.
He also is in favor of purchasing long-term care insurance whenever possible.

“Again, the biggest fear a client has is running out of money. Without any type of insurance, long-term care can wipe out an entire retirement plan. But today it does not have to,” Mitchell said, noting that long-term care riders on life insurance policies are an affordable way to defray care expenses as well as taking advantage of insurance products offering an up-front lump sum payment to cover costs. “Fortunately, today there are a lot of ways available to protect yourself that simply were not there ten years ago.”

Learn more about Marvin Mitchell and Compass Retirement Solutions, LLC, online at www.compassretirementsolutions.com