Adding value for clients through customized financial planning
Adding value for clients through customized financial planning
Proactive Advisor Magazine: Bob, how do you see your role in working with clients?
I most enjoy interacting with and guiding my clients toward their goals. Many of my clients are looking for help with retirement. They’ve worked hard to save for many years, but no one ever educated them on how to properly invest or about strategies for pulling income in retirement. I help people plan for their financial vitality over the long term and then coach them through implementing their strategies. Other clients ask me for guidance on building wealth, buying a home, saving for college, gifting money to children or grandchildren, or protecting their family from unexpected financial stress. Usually, people come to me with a combination of many financial issues, and I take a holistic planning approach with my clients.
Ideally, I want to work with clients who take their finances, their families, and their goals seriously. My clients are everyday people looking for organization, education, and a forward-moving plan. They are teachers, business owners, engineers, police officers, doctors, nurses, lawyers—basically from all walks of life.
Our firm believes in several principles that we think should apply to everyone: being good financial stewards, saving and planning for contingencies, building wealth for the future, and passing wealth efficiently to future generations. Through helping clients apply these principles, our goal is to have a positive and meaningful impact on our clients’ lives. A big part of this process is to create an atmosphere that builds and grows personal relationships with our clients. I believe in simplifying the complex world of financial planning and investments as I guide clients in achieving their goals.
Is there a specific segment that you focus on within that broad target group?
I am probably a little biased since both my mother and my wife are registered nurses, but I have found the medical profession to be a source of many clients that I enjoy working with. There are probably three key reasons for this. First, the medical profession is made up of people who are highly responsible and caring. This fits well with the core values of our firm and my own personal beliefs.
Second, nurses, doctors, and medical technicians are all very busy people who tend to work long hours. While they are usually quite successful in their field and can have incomes that range from above average to very high, they do not have much time to devote to taking care of their big-picture financial planning. They understand the value of their own time and the time of their advisor. I find they work diligently in the planning process to make it efficient and productive.
The third point is also closely connected to their profession. As highly trained professionals, they realize the benefits of working with a professional in another field—in this case, wealth management and financial-advisory services—who brings specific experience and in-depth knowledge. All of these factors have contributed to my building a specialty among health-care professionals, and it is has been perpetuated through referrals to their associates.
Talk about your philosophical approach to investment and financial planning.
Everyone’s goals are different, and no two financial plans are going to be identical. I believe every financial success story starts with figuring out “Can I do what I want to do, and when can I do it?”
My clients hire me because I have the experience, knowledge, tools, and commitment to work diligently on their behalf and to present a path toward their financial goals. At times we may have to explore some uncomfortable truths about their financial situation. I don’t think a financial coach should be there to only tell clients what they want to hear. I believe that a financial coach needs to be transparent, independent, and objective.
Our financial-planning process covers a wide variety of client financial concerns, including cash-flow budgeting, investment strategies, retirement-income planning, college and estate planning, and risk-management analysis for both insurance coverages and investments. We make it a point to keep inflation expectations and tax implications top of mind as we develop recommendations for clients.
Although I use sophisticated planning software in my process, it all really starts with getting to know clients on a personal level and making sure we are comfortable working together. I take a lot of pride in being able to navigate differences of opinions between spouses. I want to manage the relationship by presenting solutions they are both comfortable with and, most importantly, help them move toward achieving their objectives. Prioritization of goals is extremely important. Not every goal may be reached as fast or as wholly as a client or client couple might wish, but with a focused plan of action, they should make significant progress both on short-term needs and long-term objectives.
What are some key elements of your investment-planning process?
The first principle is that investment planning will flow naturally out of a client’s overall financial plan. What are their goals and objectives? Are they in the accumulation or distribution phase of their lives? What is their risk profile? What is their time horizon? Are there any special needs or tax circumstances? Do they have specific objectives related to legacy planning? Only when we work together through all of these planning issues can we turn to investment planning.
I tend to be very conservative in my investment approach, perhaps more conservative than many of my clients. I want to place an emphasis on risk management. The hard lessons of the two market crashes of this century must always be kept in mind. I also always ask myself, can a client’s objectives be met with an investment plan that is even more efficient or sensitive to risk than what we now have in place? In other words, can the client achieve returns that will meet their needs while taking on less risk or less tax exposure?
While my investment approach is customized for each client, I tend to use a bucket approach to investment planning for retirement clients. For example, I may use four types of buckets based on income needs, time frames, and risk exposure. These might be called conservative, moderate, growth and income, and more aggressive growth. The conservative bucket might be very conservative, earmarking three to five years of money needed for income in either cash or investment vehicles that are very liquid and have little exposure to volatility. As we move further out on the time horizon, buckets can take on more risk, as there is a need for the total portfolio to continue to grow to meet income needs and inflation. If the portfolio is constructed properly in all of its phases, buckets that are further out will continually replenish the income needs of the clients. We want to avoid situations where withdrawals need to be made from invested accounts when the market is going through a down period. Having longer time frames for more growth-oriented investments helps greatly with that objective.
“The first principle is that investment planning will flow naturally out of a client’s overall financial plan.”
The structure of the portfolio itself is one element of risk management. I also usually recommend to clients that some portion of their portfolio be allocated to tactical or actively managed strategies. For these types of strategies, I defer to the expertise of the third-party money managers that I work with. These types of strategies can take many forms in different asset classes or sectors and can include fixed income, equities, or even alternatives. Generally, I will usually recommend to clients some blend of active and passive strategies. The overall umbrella approach of the portfolio tends to be conservative and traditional in many senses, but within that umbrella can be many different types of strategies based on a client’s specific needs and risk tolerance. While I might be conservative in my overall recommendations, there can be a place for both highly risk-managed strategies and for more aggressive strategies, depending on the bucket under consideration.
The most important point is that I constantly seek to add value for clients. This means developing an investment approach that is not cookie-cutter and works hard to meet the specific investment goals within their overall financial plan. I am passionate about working tirelessly on behalf of my clients and strive to provide exceptional service and insights. I believe this attitude and this approach have resulted in many successful long-term relationships. That is my goal for every client and every family that I work with.
4 principles that lead to enduring client relationships
Bob Chitrathorn of Providence Wealth Planning believes that technical expertise and experience is critical in developing sound financial and investment plans for clients. But he also believes that enduring client relationships can be built on the following four approaches to client service:
- Client education. Make sure complex issues are discussed in understandable language, and present options with a review of pros and cons.
- Create a comfort level. Clients need to feel that there is an atmosphere of openness and transparency, where they are comfortable understanding and taking ownership of their financial decisions.
- Instill confidence. A function of education and feeling comfortable with decisions, clients can see a clear road map that will help them advance toward their financial objectives.
- Reinforce your value proposition. Building financial plans that set clear expectations, are goals-based, and reviewed against objectives helps clients understand the value added for their long-term financial success.
Bob Chitrathorn is vice president of wealth planning at Providence Wealth Planning, located in Corona, California. Mr. Chitrathorn offers comprehensive financial planning to clients, including investment planning, distribution strategies for retirement income, estate-conservation planning, insurance planning, and risk-management analysis.
Mr. Chitrathorn’s parents migrated to the United States in the early 1970s from Thailand. He says they “both worked extremely hard to provide opportunities for their children,” enabling him and his sister to attend private high schools. Mr. Chitrathorn says he always took to heart his mother’s advice that “education is money in the bank.” He attended La Sierra University before transferring to California State University, San Bernardino, where he earned two bachelor’s degrees, in finance and real estate, with a minor in business administration. Mr. Chitrathorn graduated magna cum laude and was named to the Golden Key Honor Society.
With over 14 years of experience in the financial industry, Mr. Chitrathorn began his career with a national financial-services firm. He says they offered “comprehensive training and support services,” and he advanced to the position of vice president of client services during his 12 years there. He joined Providence Wealth Planning in 2016 and believes its “values, mission, and services align well” with the way he would like to serve clients.
Mr. Chitrathorn and his wife enjoy spending quality time with friends and family, going to the beach, and watching movies. Their home, shared with their rescue dog, includes “a pool, putting green, and a Pittsburgh Steelers–themed bar.” They are passionate about sponsoring children and support Empowering Lives International. In 2016, Mr. Chitrathorn contributed to a book by motivational speaker Brian Tracy titled, “Success Manifesto: The World’s Leading Entrepreneurs & Professionals Reveal Their Secrets to Mastering Health, Wealth & Lifestyle.”
Disclosure: Bob Chitrathorn is a registered representative with, and securities offered through, LPL Financial, member FINRA/SIPC. Investment advice offered through Strategic Wealth Advisors Group, LLC, a registered investment advisor. Strategic Wealth Advisors Group, LLC, and Providence Wealth Planning are separate entities from LPL Financial. Investing involves risks, including possible loss of principal. No investment strategy or risk management techniques can guarantee return or eliminate risk in all market environments.
Photography by Robert Bell