jerry ganz, cfp – proactive advisor magazine – volume 5 issue 3

January 22, 2015 | Volume 5 | Issue 3

Active investment management’s weekly magazine

Swiss franc surprises

Can lower returns lead to a better retirement?

Growing a referral network

Crude oil’s message for the stock market

The impact of sequencing and volatility

Jerry Ganz

There is only one reason to investAnd it’s not to beat the S&P

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Advisor perspectives on active investment management

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3January 22, 2015 | proactiveadvisormagazine.com

LOUD & CLEAR

The impact of sequencing and volatility on portfolio valueBy Dave witkin

$

eturns, risk, pricing models, optimal portfolio construc-tion—there are so many facets of effective investing and portfolio management.

As busy as most of us are, who has time to really dig in and question conventional wisdom? So when well-known publications have said over the years that active manage-ment results in lower returns than passive management, I used to take that information at face value.

But like many things in life, the deeper you dig into the “passive management wins” numbers, the less satisfying you find the con-ventional “wisdom.” Two important problems with the common arguments concern risk and withdrawals. It turns out some “passive wins” news stories don’t take risk or withdrawals into account. But how much do those factors really matter? In fact, their impact is so strong that leaving them out of the discussion may lead to financially destructive conclusions.

Let’s start with a bit more information com-paring active and passive strategies. Dr. Antti Ilmanen, a Ph.D. graduate of the University of Chicago and currently Managing Director at AQR Capital Management LLP, wrote a book in 2011 titled, “Expected Returns:

Paula (Passive management) Ann (Active management)

Startingcapital

Returnrate Return Withdrawal WithdrawalEquity

Startingcapital

Returnrate Return

8.5% Arithmetic average 7.0% Arithmetic average

Year 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 10

$1,000,000 -8% -$80,000 -$50,000 $870,000 $1,000,000 -8% -$80,000 -$50,000 $870,000 -28% -$243,600 -$50,000 $576,400 $870,000 -4% -$34,800 -$50,000 $576,400 9% $51,876 -$50,000 $578,276 $785,200 7% $54,964 -$50,000 $578,276 36% $208,179 -$50,000 $736,455 $790,164 16% $126,426 -$50,000 $736,455 14% $103,104 -$50,000 $789,559 $866,590 13% $112,657 -$50,000 $789,559 -15% $-118,434 -$50,000 $621,125 $929,247 -5% -$46,462 -$50,000 $621,125 28% $173,915 -$50,000 $745,040 $832,785 18% $149,901 -$50,000 $745,040 21% $156,458 -$50,000 $851,499 $932,686 16% $149,230 -$50,000 $851,499 10% $85,150 -$50,000 $886,649 $1,031,916 8% $82,553 -$50,000 $886,649 18% $159,597 -$50,000 $996,245 $1,064,469 9% $95,802 -$50,000

Figure 2: Comparative hypothetical returns including $50,000 annual withdrawals


Startingcapital

Returnrate Return Equity

Startingcapital



Figure 1: Comparative hypothetical returns without withdrawals

$1,000,000 Year 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 10

-8% -$80,000 $920,000 $1,000,000 -8% -$80,000 $920,000 $920,000 -28% -$257,600 $662,400 $920,000 -4% -$36,800 $883,200 $662,400 9% $59,616 $722,016 $883,200 7% $61,824 $945,024 $722,016 36% $259,926 $981,942 $945,024 16% $151,204 $1,096,228 $981,942 14% $137,472 $1,119,414 $1,096,228 13% $142,510 $1,238,737

$1,119,414 -15% -$167,912 $951,502 $1,238,737 -5% -$61,937 $1,176,801 $951,502 28% $266,420 $1,217,922 $1,176,801 18% $211,824 $1,388,625

$1,217,922 21% $255,764 $1,473,686 $1,388,625 16% $222,180 $1,610,805 $1,473,686 10% $147,369 $1,621,054 $1,610,805 8% $128,864 $1,739,669 $1,621,054 18% $291,790 $1,912,844 $1,739,669 9% $156,570 $1,896,239

An Investor’s Guide to Harvesting Market Rewards.” After examining a number of busi-ness and academic sources, Dr. Ilmanen found momentum and high book-to-market ratio (referred to as “value” for simplicity)—both active management strategies—significantly outperformed stocks, bonds, and almost all other asset classes on a risk-adjusted basis.

I can already hear some of you saying, “But my clients only care about absolute returns.” Of course they do, and who can blame them? But how would they feel if we showed them how lower average returns with less volatility

could result in significantly more money in their pockets?

Let’s walk through an example. Say you have two clients, Paula and Ann. Paula has heard through the news that active manage-ment is a “bad deal” for investors and she only wants to use passive investment strategies in her portfolio. Ann, on the other hand, is more open to active strategies and believes that in the hands of a skilled advisor, they can pro-vide significant benefits.

Dr. Ilmanen and others have shown that active strategies using momentum and value

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continue on pg. 11


Startingcapital

Returnrate Return Withdrawal WithdrawalEquity

Startingcapital



Year 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 10

$870,000 $785,200 $790,164 $866,590 $929,247 $832,785 $932,686

$1,031,916 $1,064,469 $1,110,271

$1,000,000 -8% -$80,000 -$50,000 $870,000 $1,000,000 -8% -$80,000 -$50,000 $870,000 -28% -$243,600 -$50,000 $576,400 $870,000 -4% -$34,800 -$50,000 $576,400 9% $51,876 -$50,000 $578,276 $785,200 7% $54,964 -$50,000 $578,276 36% $208,179 -$50,000 $736,455 $790,164 16% $126,426 -$50,000 $736,455 14% $103,104 -$50,000 $789,559 $866,590 13% $112,657 -$50,000 $789,559 -15% $-118,434 -$50,000 $621,125 $929,247 -5% -$46,462 -$50,000 $621,125 28% $173,915 -$50,000 $745,040 $832,785 18% $149,901 -$50,000 $745,040 21% $156,458 -$50,000 $851,499 $932,686 16% $149,230 -$50,000 $851,499 10% $85,150 -$50,000 $886,649 $1,031,916 8% $82,553 -$50,000 $886,649 18% $159,597 -$50,000 $996,245 $1,064,469 9% $95,802 -$50,000

Figure 2: Comparative hypothetical returns including $50,000 annual withdrawals


Startingcapital


Startingcapital



Figure 1: Comparative hypothetical returns without withdrawals

$1,000,000 Year 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 10

-8% -$80,000 $920,000 $1,000,000 -8% -$80,000 $920,000 $920,000 -28% -$257,600 $662,400 $920,000 -4% -$36,800 $883,200 $662,400 9% $59,616 $722,016 $883,200 7% $61,824 $945,024 $722,016 36% $259,926 $981,942 $945,024 16% $151,204 $1,096,228 $981,942 14% $137,472 $1,119,414 $1,096,228 13% $142,510 $1,238,737

$1,119,414 -15% -$167,912 $951,502 $1,238,737 -5% -$61,937 $1,176,801 $951,502 28% $266,420 $1,217,922 $1,176,801 18% $211,824 $1,388,625

$1,217,922 21% $255,764 $1,473,686 $1,388,625 16% $222,180 $1,610,805 $1,473,686 10% $147,369 $1,621,054 $1,610,805 8% $128,864 $1,739,669 $1,621,054 18% $291,790 $1,912,844 $1,739,669 9% $156,570 $1,896,239

can outperform passive on both an absolute and risk-adjusted basis. But for the sake of argument, let’s say that when we consider fees, passive management outperforms an active portfolio during the hypothetical ten-year period we will use in our example. More spe-cifically, the arithmetic average return is 8.5% for the hypothetical passive portfolio and 7.0% for the hypothetical active portfolio. We use the arithmetic average return because it is often used by proponents of passive man-agement strategies as “proof ” that a hands-off approach outperforms. As shown in Figure 1,

the final value of Paula’s passive portfolio is slightly higher than Ann’s actively managed portfolio, although the difference—only about $16,000—is probably smaller than you might expect.

So even though the hypothetical active portfolio had 1.5% lower average annual returns, the passive and active portfolios have almost the same overall performance over ten years. But I forgot to mention some-thing: both Paula and Ann need to withdraw $50,000 each year from their respective ac-counts. Since Paula’s passive portfolio had the

slightly higher absolute returns in Figure 1, you would expect her portfolio to outperform Ann’s despite the withdrawals, right? Wrong. Let’s take a look at the table including the withdrawals.

The annual percent returns for both port-folios are the same as noted earlier. Despite the fact that Paula’s passive portfolio outper-formed Ann’s active portfolio in seven out of ten years, Ann’s active portfolio ended up in better shape. As shown in Figure 2, the active portfolio finishes the ten years with an 11% higher final equity balance.

January 22, 2015 | proactiveadvisormagazine.com 5

1.25

1.15

1.05

0.95

0.85

Dec 22 Dec 29 Jan 5 Jan 12 Jan 19

Jump in Swiss franc triggers short-term losses and long-term uncertainty

ast week’s announcement by the Swiss National Bank that the Swiss currency could float more freely took most market participants by surprise—to put it mildly. Within the past month,

statements by senior officials had convinced markets that the franc’s 1.20 peg to the euro would remain intact for the foreseeable future.

Within minutes of the news (1/16) that the franc’s exchange rate would be untethered, the currency surged 25-30% against the euro and 18% against the US Dollar. Several currency trading firms operating on considerable leverage (or allowing clients to do so) and inadequate hedging were threatened with violation of regulatory capital rules. Some sought and received cash infusions from bigger players, a few went insolvent, and others remain at considerable risk. Major global banks, such as Citigroup and Deutsche, reportedly suffered losses over $100 million, and many hedge funds also took significant hits.

But the long-term impact for Switzerland, the European Union, Russia, and trading partners around the world will take some time to shake out. The immediate impact for Swiss companies, who will now be selling exports at roughly 10-25% immediately higher prices, was reflected in steep losses for the Swiss blue-chip SMI benchmark. It was off 15% in the two trading days following the announcement and ended the week with its biggest weekly losses

L

Source: XE.com

since the financial crisis of 2008, down 13%. Interestingly, in dollar terms, the iShares MSCI Switzerland Capped ETF (EWL) gained 3.2% for the week, reflecting the appreciation of the franc.

Barron’s noted that the prior fixing of the franc versus the euro, meant to keep export prices stable, gave the currency a unique global

status. Their analysis said, “The rest of the world ‘used’ the franc, exploiting it by borrowing the currency at ultralow interest rates, certain in the promise that its exchange rate versus the euro would be cemented.” Now, those counting on that assumption are facing roughly 20% higher carrying costs for a wide variety of financial transactions.

SWISS FRANC (CHF) EXCHANGE RATE PER 1 EURO (EUR)


TOPPING THE CHARTS

Jerry Ganz

There is only one reason to investAnd it’s not to beat the S&PBy David WismerPhotography by Mike Roemer

Generating investment returns that will meet a client’s own plan-based needs is the goal. Risk management is the first step.

8

Jerry Ganz, CFP

President, Jerry Ganz Financial PlanningGreen Bay, WI

Broker-Dealer Packerland Brokerage Services

Licenses 6, 7, 63, 65

Estimated AUM $25M

Author, “Plan-based Investing”

Proactive Advisor Magazine: Jerry, how do you differentiate your firm?

Jerry Ganz: On the basis of two core con-cepts. The first, and I have actually written a book about it, is the idea of plan-based invest-ing. The second is our firm’s use of third-party, active investment managers. I really know of no other financial advisor in the Green Bay area who combines those two operating principles the way that we do.

Let’s drill down into both of those concepts. What do you mean by plan-based investing?

When I sit down for the first time with a prospective client, after introducing our capa-bilities and hearing about their needs from a 10,000-foot level, I ask them to share their fi-nancial plan with me. Most people do not have one, or may put forward an investment policy statement and think that represents a plan.

The truth of the matter is they might have developed rela-tionships with several financial profession-als—their insurance agent, their banker, their broker—but no one has ever really developed a comprehensive financial plan outlining their actionable goals and objectives. When I talk them through the basics, our planning process is usually a real eye-opener. They quickly come to understand that it is virtually impossible to have a sound investment strategy without first having a sound financial plan. Goals or dreams never put in writing never became real goals—a total financial blueprint is really the key to investment success.

We also believe in staying on the cutting edge of technology. All of my clients have their own website that they may log into that has daily updates of all of their investment accounts: the accounts I manage, their 401(k) plans, their bank accounts, etc. We continually update their other assets, such as real estate, and their cash flow statement, so they can have instant access to their total financial picture. It is a true wealth management system.

Where do third-party active managers fit into this equation?

Once we have established the plan, we need to help our clients execute it. Like many

of my peers, I was brought up in the industry on Modern Portfolio Theory and pretty stan-dard asset allocation models. Several years ago I was at a large conference where I was first introduced to active investment management. It sounded exactly like what I was looking for in terms of providing more risk management for client accounts and a high level of sophis-ticated, quantitative asset management. I freely admit that while I am a student of the markets and love investing, I make no claim to being an expert asset manager. Third-party managers are the experts with dedicated staff and resources that I could never duplicate. Each year I move more and more client money in the direction of third-party managers.

I started slowly with the process and initially we used a manager with a fairly straightfor-ward rotational strategy that could actively move money into the better-performing asset classes or go to cash. It was a variation of trend following in an asset-class sense and rotated to whatever was performing best at the time,

whether equities or fixed income, domestic or international. I liked to show clients what I joked was the “periodic chart” of all major asset classes, and explained that our goal was to stay on the top half of the page with their investments. Obviously, it was a lot

more complicated than that, but that was the basic idea.

The somewhat revolutionary idea of active investment management has come a long way since then and the array of different managers and various strategies is quite impressive. It is my job, working through my broker-dealer, to identify the managers and appropriate strategic approach that works with a client’s specific plan-based financial goals.

How do you determine the strategies that may work for a specific client?

I sound like a broken record, but it is really based on their planning needs, time horizon, and risk profile.

I use one manager strictly for a tactical strategy that can go long the market, short, or into cash, with very low beta and is fairly conservative. I use other managers with more growth-oriented strategies that are more suited to clients with longer time frames and who are further from retirement. The idea is that a younger client will be able to give those

strategies more time to come back from draw-downs and revert to the mean.

One thing people may not realize is that active managers also provide strategies that are more market- or index-based and can really take advantage of bullish trends like we have seen over the past few years. The difference is that, as opposed to buy-and-hold strategies, there is a risk management component also built into these, which is very different from what was available 20 years ago. Active strategies can work well for a variety of different clients, different risk profiles, and different investment time hori-zons. Risk management is really the very first requirement of all of the strategies I use.

continue on pg. 10

It is virtually impossible to have a

sound investment strategy without first

having a sound financial plan.


Show your clients a

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A complete list of all of our recommendations over the last 12 months and Brochure Form ADV Part 2A are available upon request.

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What is your process for introducing this to clients?

I talk with clients about the performance of the S&P 500, but in a very different way. Most people are familiar with the Index and certainly that is what the media and markets are focused on. The core educational component is in look-ing at the volatility of the S&P over the past 20 years or so. I explain to clients that if they want the very top years of the S&P performance, they also have to be willing to accept drawdowns of up to 50%, based on actual history. When we look at that in terms of their real portfolio dollars, it does not sit well with most people.

Second, I explain that the S&P 500 is really irrelevant to the return performance they need to fulfill their investment goals. They require returns at a manageable risk level that will meet their own personal plan-based requirements, not “market returns,” whatever they may happen to be in any given year. One of our

third-party managers has an excellent software program that can look graphically at a probable range of expected returns, showing the prob-abilities of highs and lows within that range. Clients can clearly see where their returns will likely fall over time.

I also spend a fair amount of time dis-cussing financial disaster preparedness. The world is a very different place today. We have potentially severe world economic problems on a fairly constant basis. We examine how a broad-based recession or other event might impact a client’s life, income, debt servicing, or retirement. And there does not have to be a true calamity to create risk—there are plenty of more common hidden risks, from govern-ment actions to inflation risks to health risks.

We do not know all of the answers for sure, but we can prepare for the possibilities by using risk management in all elements of a financial and investment plan.

continued from pg. 9Jerry Ganz

10 proactiveadvisormagazine.com | January 22, 2015

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What is going on, you ask? There are two issues at work: (1) the sequence of returns and (2) the impact of volatility.

You may be aware that the sequence of returns makes a difference in terms of the ending portfolio value. In other words, a negative return in year 1 has a very different impact than a negative return in year 10. But in this case, the general sequences of returns—when positive versus negative years occur in the two portfolios—are almost identical.

continued from pg. 5

continue on pg. 13

Lower returns

How the world’s wealthiest families investDiversification, balance, and risk management are critical in a world where it is hard to find attractive short-term valuations.

Top 5 global issues to watchSchwab says the investment environment suggests another year of gains for global stocks but there are still critical issues to watch closely.

Is this finally the end of falling U.S. interest rates?The divergence of real 10-year Treasury yields from the University of Michigan Consumer Sentiment Index is usually an indicator that the interest rate environment is primed for change.

L NKS WEEK

Active strategies using momentum and value can outperform passive on both an absolute and

risk-adjusted basis.

The larger issue here—and a dynamic often overlooked by stud-ies and news articles proclaiming passive management “outperfor-mance”—is the volatility of returns. An appropriately constructed active management portfolio can be significantly less volatile than a passive portfolio. Returning to Dr. Ilmanen, he shows that from 1990 to 2009, U.S. equities had an average return of 8.5%, but the volatility was 15.5%, nearly double the return. In contrast, value investing had a 7.6% average return with a 7.6% annual volatility,


Crude oil’s message for the stock market

Tom McClellan is the editor of The McClellan Market Report newsletter and its companion, Daily Edition. He started that publication in 1995 with his father Sherman McClellan, the co-creator of the McClellan Oscillator, and Tom still has the privilege of working with his father. Tom is a 1982 graduate of West Point, and served 11 years as an Army helicopter pilot before moving to his current career. Tom was named by Timer Digest as the #1 Long Term Stock Market Timer for both 2011 and 2012.

Crude oil (Log Scale) set forward 10 yearswith 60-month MA

he big question that stock market analysts are asking themselves lately is what it means to have crude oil prices drop below $50. The more

proper question is, “What does the drop in crude oil prices now mean for the stock market 10 years from now?”

One of the the most fascinating intermarket relationships ever uncovered is the one between stock prices and crude oil prices. The core principle which kept so many from seeing it involves the delayed reaction. The movements of stock prices tend to echo the movements of crude oil prices, albeit with a 10-year lag.

I first uncovered this when I gathered the data for a long-term view of crude oil prices. I realized when looking at that chart that I was seeing a facsimile of the pattern in the DJIA—but the two did not align properly. I found that by shifting the oil price plot forward by 10 years, I got a much better alignment of the price patterns.

This was a big revelation! The automobile boom in the 1910s led to a big oil price spike toward a 1920 top, which led to the overly speculative Texas oil boom of the 1920s. That March 1920 oil price top had its echo just under 10 years later with the September 1929 stock market top. The flat period for oil prices of the 1950s and 1960s was replicated by seeing stock prices move sideways from 1966-92. There are multiple other points of similarity in their histories.

The relationship got into a little bit of trouble when the Arab Oil Embargo put a thumb on the scale starting in 1973. And the Iranian revolution in 1979 perturbed it further. But once the oil market returned to a normal fluctuating balance of supply and demand in the mid-1980s, the relationship trued itself.

T

A November 1998 bottom for crude oil prices had its echo with the March 2009 stock market bottom. And the rebound in oil prices from that 1998 low to the speculative commodity bubble top is now having its own replication in the form of stock prices undergoing a fairly linear uptrend lasting longer than most bull markets. Some credit the Fed and QE, but crude oil knew about it even before the financial crisis and subsequent policy response.

What this means for money managers

One of the most helpful insights for trading is to know whether one is in a trending market or a corrective trading-range market. The message from oil prices ten years ago is that we should see a continued equity uptrend until we get to the inflection point that is the echo

of the speculative commodity bubble top in 2008, which should be due to arrive in 2018. The difficult point to ascertain is how much credence to give to that 2008 event, as there have been those prior exogenous forces acting on the oil market in the past which did not see a precise echo in the stock market.

I do not know if we will see a precise replica of the 2008-09 oil price decline in 2018, but the period from 2018-2025 should be one of those periods when market timers rule. The big drop in oil prices during late 2014 should have its echo in stock prices during 2024. That will be an ugly time for stock market participants, but we have some time to prepare for that drop as well. Right now, we have three more years of an uptrend to harvest, which is the more important task to focus on.

Proactive Advisor Magazine presents weekly commentary provided by well-known market analysts, financial authors, investment newsletter publishers, and economists. The opinions expressed each week represent their personal perspectives and not necessarily those of the magazine.

proactiveadvisormagazine.com | January 22, 201512

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continued from pg. 11

and momentum had a 13.1% average return and an 11.2% annual volatility—in other words, volatility was significantly lower in the active strategies.

It is also worth noting that since both clients needed to make withdrawals from their accounts each year, most advisors oriented to

Finally, while there are always exceptions, cer-tain active management strategies with proven track records, like value and momentum, could significantly outperform a passively managed portfolio. While we have used fairly conser-vative rates of return in comparing the two hypothetical portfolios, Dr. Ilmanen’s study suggests that using the right active strategies can outperform passive strategies on both an absolute and risk-adjusted basis.

Lower returns

Dave Witkin is a partner in StatisTrade, a trading strategy modeling and consulting company. Mr. Witkin has traded stocks, commodities, and options over the last 20 years, and in 2011 was featured in Dr. Van Tharp’s book, “Trading Beyond the Matrix”.

How would clients feel if we showed them how lower average returns with less volatility could result in significantly more money in their pockets?

passive management would likely put a larger proportion of the client’s assets into bonds versus equities. This means the 8.5% annual returns for passive management over the ten-year period shown are surely on the optimistic side—the larger allocation to bonds would reduce the annual returns, making the active management strategy look even more advanta-geous in comparison.

So what is important to take away from this analysis? First, looking only at average annual returns in a vacuum can be misleading. The vol-atility of returns can make a major difference. Second, when you also consider withdrawals, the reduced volatility of some active manage-ment strategies has the potential to make a far larger impact on portfolio value than losing some small portion of returns due to fees.


Return

Volatility Sharpe RatioU.S. Equities 8.5%

15.5%

0.34Momentum 13.1%

11.2%

0.88

Value

7.6%

7.6%

0.51

Comparing twenty years of returns and volatility, 1990-2009

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Copyright 2015 © Dynamic Performance Publishing, Inc. All rights reserved. Reproduction of printed form, whole or in part, without permission is prohibited.

EditorDavid Wismer

Associate EditorElizabeth Whitley

Contributing WritersTom McClellanDavid WismerDave Witkin

Graphic DesignerTravis Bramble

Contributing PhotographerMike Roemer

January 22, 2015Volume 5 | Issue 3

Proactive Advisor Magazine is dedicated to promoting and educating on active investment management. Distribution reaches a wide audience of financial professionals who advise clients on investments and portfolio management. Each issue features an experienced investment advisor who offers insights on active money management, client service, and investment approaches. Additionally, Proactive Advisor Magazine offers an up-close look at a topic with current relevance to the field of active management.

The opinions and forecasts expressed herein are those of the author and may not actually come to pass. Any opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security nor specific investment advice. The analysis and information in this edition and on our website is for informational purposes only. No part of the material presented in this edition or on our websites is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed nor any portfolio constitutes a solicitation to purchase or sell securities or any investment program.

Growing a referral network

Trish BeineGreenfield, WI

The Strategic Financial AllianceClearPath Financial Partners

Trish Beine is a registered representative and investment adviser of The Strategic Financial Alliance (SFA). Securities and advisory services offered through SFA, member FINRA/SPIC which is unaffiliated with ClearPath Financial. There is no guarantee that active management will outperform a buy-and-hold approach to investing. Investing involves risks, including the potential loss of principal. Current performance may be lower or higher. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance is no guarantee of future results. Please note that individual situations can vary. Therefore, the information presented here should only be relied upon when coordinated with individual professional advice. Supervising office: 414-545-0404.

I also think it is very important to be networking within the organizations that are important to me on a personal level. This includes business organiza-tions, my college alumni group, volun-teer groups, the YMCA, and so forth. I am an avid cyclist and have made several valuable contacts through biking.

The point is not to present oneself always in a sales mode, but to acknowl-edge that we offer a highly professional service that the overwhelming majority of our clients find very valuable. It is important to gracefully let people know that you are in the advisory business and available for any sort of discussion if that is of interest to them.”

ne of the wonderful advantages of working with our firm is the em-phasis on marketing. If

I am not talking to people and meeting with them on a consistent basis, then I’m not growing my business. We have a saying at our firm of ‘3 + 3.’ This simply is a mental reminder that a person sit-ting within three seats of you virtually anywhere could possibly use your help with financial matters —and that it is important to reach out to a new con-tact within three days. Those simple thoughts are a constant prompt that we are almost always in a position to build our networks.

Our office then helps us take this networking to the next level by focus-ing on education. We hold seminars on average once a month and invite indi-vidual questions and personal follow-up visits. The third-party asset managers we have access to have come in to share updates on the economy and their strat-egies. We have had a special seminar on what is important to women in investing and retirement. We have covered Social Security planning and how to work within governmental programs.

The firm will advertise these as well as promote to clients and their guests. It is far from a hard-sell presentation, but rather it is very effective in reinforcing current client relationships, getting our name out there, and generating new prospects.

O“

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TIPS & TOOLS

jerry ganz, cfp – proactive advisor magazine – volume 5 issue 3

Economy & Finance