Shifting Markets Demand Capability of Taking Defensive Positions

Lessons from the 2008 economic meltdown have stuck with Leo Gotleib, owner of Gotleib & Associates, a financial-planning firm headquartered in New Jersey. Industry professionals traditionally used a buy-and-hold strategy, believing “what goes down eventually comes back up,” Gotleib said. “In 2008, we learned that doesn’t necessarily work.” Instead, his response was to adopt a more proactive style of management. In addition to implementing quarterly reviews of client portfolios, his firm partnered with a technology company to develop its own Dynamic Asset Allocation system. This system – which steadily analyzes the performance of market sectors – allows Gotleib to take defensive positions in declining markets and quickly re-allocate client resources to safer investments.

The firm operates in three niche markets, an approach that Gotleib has long favored. Its primary market has been in managing retirements of telecommunication employees in New Jersey, Manhattan and southeastern Pennsylvania. Gotleib conducts educational workshops and markets retirement-planning services directly to telecomm employees and not through a contract with specific companies. He recognized an emerging opportunity as telecomm companies continued to offer retirement incentives to its employees wishing to replace them with updated technology.

“Telecomm retirees are typically in their mid-fifties, making it essential they stay disciplined in their investment strategies,” Gotleib said. “They can take a very reasonable distribution, where the probability is high for obtaining a return that is greater than the distribution.”

A second niche involves working with CPAs across the country to provide advanced tax planning for their high-net-worth clients. The firm’s third niche market is offering comprehensive financial planning services through which it counsels physicians about what they must do for a successful retirement. Gotleib plans to increase activity in this sector of his business.

A major concern for retirement professionals today, Gotleib noted, “Is that too many people focus on fees, not on the benefit of establishing a relationship with a financial planner.” He said that the popularity of online services, make it easy for people to conduct transactions themselves. “In an up market, they get a little bit of success and they quickly forget about when the market crashed in 2008.” When he was 18, Gotleib acquired an insurance license at the urging of his father, an insurance professional. After graduating in 1984 from Monmouth University in New Jersey, he began a career in financial planning, while employed at John Hancock Financial Services. His manager was opening an independent financial planning firm and encouraged Gotleib to join him. In 1989, he began his own firm.

“Financial planning was the new buzzword then, however it was not really defined,” Gotleib said. “In many situations, it was a fancier way of selling insurance.”
In speaking of his clients now, Gotleib emphasized, “The goal is not to double their investment, the goal is to make sure they don’t run out of money.”

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