Providing exceptional personal service to clients
Providing exceptional personal service to clients
Proactive Advisor Magazine: Jim, how do you see your mission in working with clients?
Jim: We have been helping individual investors and small businesses with their financial planning, retirement, investment, and insurance needs since 1994. Our firm provides independent advice and custom plans and solutions, with a goal of providing exceptional personal service to our clients. As independent advisors and registered representatives, we believe that not being tied to one company’s products and services is a benefit to our clients—we can offer a range of financial solutions from many providers.
Our mission statement is something we believe strongly in. We strive to help clients plan for and accomplish their financial goals in a timely manner, helping them progress financially toward what they want most out of their lives. We want to be respected by our clients for our professional knowledge, integrity, independent financial advice, and excellent service.
“We want to be respected by our clients for our professional knowledge, integrity, independent financial advice, and excellent service.”
Jacob, what is your role at the firm in terms of serving clients?
Jacob: I work closely with Jim on our client engagements, usually as a co-advisor at client meetings. I also get heavily involved with planning and research. As comprehensive financial advisors, we work together to help clients find a path to and through retirement that gives them a greater sense of security about their financial futures.
Our real specialty is to closely examine each piece of a client’s financial picture, including their pensions, employer retirement plans, IRAs, government benefits, and other assets, to provide ways to effectively use their resources in building a sound retirement plan. To give one example, we will help them find ways to navigate and effectively claim and use their Social Security benefits as part of their holistic retirement plan. We use a sophisticated planning software suite that allows us to follow a goals-based methodology throughout their plan and employ various assets in different roles. Our soup-to-nuts approach allows clients to feel confident with their plan for retirement.
Jim, talk about your approach to financial planning.
Jim: For almost my entire career, I have wanted to be a consultative advisor, not product-centric. Going back to 1995, when our AXA office was first introduced to financial-planning software, I was one of the first advisors who embraced it enthusiastically. This was early in the adoption phase of computers, and we had to put in many hours of learning, but I found it extremely worthwhile. Ever since, I have been a process-oriented financial advisor, working closely with clients to ascertain their wants and needs and then to establish optimistic but achievable objectives. From there, those objectives drive the development of appropriate recommendations and financial solutions.
Achieving financial freedom does not happen by accident. It takes preparation and strategy to preserve what clients have spent a lifetime building. Clients’ goals typically include preparing for milestone events like college funding or retirement, and we look at their financial picture for their entire lifetime and build strategies that can be adaptable to life’s changes.
Jacob, what are the major areas you address in the planning process?
Jacob: This could include four main areas, depending on a client’s stage in life and their objectives: wealth accumulation, income distribution, wealth preservation, and wealth transfer. We focus on helping clients understand the nature of their resources, what their vision of the future is, and then how to use their resources to best actualize that vision.
Financial-planning software is integral to the process, but building the relationship and understanding our clients’ needs is at the forefront. Our first planning meeting is an in-depth discovery meeting and fact-finding session. We then conduct our internal due diligence and planning sessions regarding their financial picture and their assets, future potential income streams, and liabilities. Our second session will involve the presentation of a financial plan, where we will confirm the numbers and start to discuss strategy. The third session is usually a presentation of specific strategy recommendations and a timetable for implementation. We allow clients time to assimilate that information and, if they are comfortable, will move into the implementation phase. After implementing the initial strategy, we will regularly monitor and communicate on clients’ progress toward objectives, so we can make any necessary adjustments—including those that may be necessitated by a major life event.
Jim: Every client is very different, so it is a highly customized process within the broad framework that Jacob described. Our primary focus is on the individual or couple who has engaged us. We first ascertain their view of a long, healthy, and financially comfortable life. The next question we need to answer is what happens if one or, in the case of a couple, both suddenly pass away or are disabled? Will their financial plan be able to survive that? So, while we have a strong emphasis on building wealth, income distribution in retirement, and legacy planning, we also need to make sure other risk is managed in our clients’ lives with proper insurance coverages. When we are all assured on that point, we can move on to the many other areas of the financial-planning process, including things like helping plan for college funding or how they might approach the issue of long-term care for later in life. The challenge for the plan is prioritizing a client’s needs and concerns and addressing them within the available financial resources.
What is your broad investment philosophy for planning for retirement funding?
Jim: We subscribe to the concept of a bucket planning philosophy, consisting in simple terms of three buckets: The “now” bucket, which covers financial needs in the next one to five years; the “soon” bucket, which is the next five to 10 years; and then the “later” bucket, which is 10 years and out. This allows us to better identify risk mitigation for each of those buckets, with the goal of having strategies that can both grow assets and have them available for our clients when they need them. Our planning software helps us work through many potential scenarios and develop the action plan we feel is most appropriate.
Jacob: The way we apply risk-management principles may vary by each bucket. For the shortest-term bucket, we want a high degree of liquidity. If the money is invested, it would usually be in very tactical investment vehicles that can move back to cash if the situation and indicators call for that. The longer-term bucket, out over 10 years, will probably have more strategic investments that, because of the time frame, can withstand volatility in the markets and might be more passive in nature. The middle bucket is usually a combination of the two in some allocation, both tactical investment strategies and more strategic. The middle bucket will be more growth-oriented than the first bucket, while risk is also being mitigated through the tactical strategies.
Jim: For that first bucket, we may also have cash or cash-like instruments that I will call “rainy day” money needed for everyday lifestyle expenses or an unexpected expense. For many clients, we might also use annuities of some type, depending on their needs and their financial plan. If their fixed-income stream and guaranteed income through annuities largely cover their daily living expenses in retirement, the cash portion of a plan becomes somewhat less important.
We usually outsource investment-management services for our clients, using highly qualified third-party investment firms. My attitude is that our focus should be on client relationships, providing strong overall planning services, and diligently executing plans. Outside investment professionals have the staff, resources, and strategic development capabilities that far surpass our capabilities in the investment arena. They can monitor markets and their strategies’ performance on a continuous basis and, with tactical strategies, can adapt to changing market conditions.
We conduct due diligence on our outside managers and make sure we fully understand the performance objectives of their strategies. I am most interested in the analysis of the longest results-oriented performance data that they can provide. While this does not guarantee future performance, we want to fully understand how tactical strategies have performed in different market environments and how they have been able to manage risk. Jacob spends a lot of time in this process and does a very good job. We also believe it is important that our managers provide strong service, systems, and backroom capabilities.
I believe our rigorous process in the evaluation of both outside managers and their specific strategies is illustrative of the overall way we run our practice on behalf of our clients. We want to act as their advocates in all ways and deliver a financial- and investment-planning process that enhances their probabilities for achieving success with their important life and financial goals.
Presenting a strong commitment to clients
Jim Bales, founder and principal of James Bales Financial, LLC, and his son, Jacob Bales, provide comprehensive financial-planning services and implementation strategies to individuals and small businesses. They believe it is important to set high client expectations and share their mission statement, vision, and commitment with all current and prospective clients. The firm’s “Commitment to Clients” includes the following seven principles:
- To be committed to the firm’s mission.
- To set reasonable expectations, and then strive to surpass them.
- To always do what is in the best interest of their clients.
- To acknowledge a mistake and solve it immediately.
- To be proactive when an opportunity to help their clients arises.
- To take time to educate clients.
- To be proud of their work, but never satisfied.
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James (Jim) Bales has been in the financial-services industry for 24 years and is the founder of James Bales Financial, LLC. Before becoming an independent advisor in 2001, he worked with Equitable/AXA Advisors for seven years. He is a registered principal and branch manager for Centaurus Financial, Inc. His designations include Registered Financial Consultant (RFC) and Life Underwriter Training Council Fellow (LUTCF). Mr. Bales is a past president of the Virginia Peninsula Association of Insurance and Financial Advisors. He is a member of the Million Dollar Round Table (MDRT) and has qualified for MDRT, Court of the Table, and Top of the Table designations since 2001. He earned special recognition from Centaurus Financial in 2011 and 2017.
Mr. Bales and his wife have two children and two grandchildren. He enjoys spending time with his family and a variety of outdoor activities, including boating, fishing, golf, and hunting. In 2014 and 2016, he took part in volunteer mission trips to Chimbote, Peru.
Jacob Bales joined James Bales Financial in 2013. He is a fully licensed registered representative and works as a co-advisor with his father, James Bales, assisting in planning, research, and advising clients. He is the Social Security specialist for the firm. Mr. Bales also belongs to the Estate Planning Team, a professional group composed of tax attorneys, advisors, brokers, and CPAs committed to assisting clients with business transitions.
Mr. Bales graduated from the University of Virginia, earning a bachelor’s degree in environmental science. He and his wife have two young children, with the recent birth of their second son. He enjoys volunteering with children’s programs at his church and, when time permits, likes to play tennis.
Disclosure: James and Jacob Bales offer securities and advisory services offered through Centaurus Financial, Inc. Member FINRA and SIPC. James Bales Financial and Centaurus Financial, Inc., are not affiliated companies. MDRT members must meet a certain level of premium, commission, or income during the year, and they must also adhere to strict ethical standards.
Photography by Don Monteaux