For Financial Planners, a Year of Tough Questions
The New York Times, October 16th, 2009
If you think you’ve had a hard time reckoning with your own finances in
the last 18 months, try putting yourself in the shoes of the
financial planners who’ve been answering to scores of unhappy clients.
The planners, after all, were the ones who were supposed to help
their clients avoid trouble in the first place. “I feel like I’m
finally able to leave the witness protection program,” said Ross Levin,
president of Accredited Investors in Edina, Minn. “There has been a
loss of confidence in us and in the world, and a sense of betrayal.
They did everything we told them to do, and it seemed like it didn’t
work out.”
Though markets have improved, they are still far from
where they once were, and that has made for some difficult discussions
between financial professionals and their clients.
I wanted to
find out more about those conversations. How much were clients pushing
back, for example, and what were they saying? That was the main reason
I moderated a discussion last Sunday at the Financial Planning
Association annual meeting in Anaheim, Calif. (I received no
compensation for my role there.)
While the planners were
resolved and well rehearsed in front of hundreds of their peers, it was
also clear that they had been severely tested in the last year. During
the hourlong session, I quizzed five of them about the toughest
questions their clients had asked. Here are those questions, along with
the planners’ responses.
PREDICTING THE FUTURE So why didn’t most financial planners see all of this coming? Weren’t the signs obvious?
“This question actually presumes that there is something wrong with not
having seen this coming,” said Elissa Buie of Yeske Buie, with offices
in Vienna, Va., and San Francisco. “We live in a chaotic system, and
chaotic systems are not predictable. But we know the range of
possibilities, and this was always a possibility.”
Though most
clients tend not to remember it years later, good financial planners
will generally sit down at the beginning of a relationship, after
clients have declared the sort of risk tolerance they think they have,
and remind them how bad things can get in a truly outlying year. Well,
2008 into 2009 was one of those years.
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