Coaching clients toward financial-planning success
Coaching clients toward financial-planning success
Proactive Advisor Magazine: Tyler, talk about how you entered the financial-services business.
I was interested in sports from an early age. I worked hard at it, became a pretty good athlete, and was on my high school’s baseball, football, and track teams. I was recruited by the University of Wyoming, where I started for three years as a wide receiver. My dream was to play professional sports, but I realized that was just not in the cards. With a degree in communication, a college internship in sports broadcasting, and my love of sports, I thought that sports broadcasting would be a perfect career choice. I landed a job with a station handling the games of one of Denver’s pro teams and did all sorts of jobs on the production crew. While that was great, I was recently married and felt that the long hours and time away from home was not an ideal fit for my family.
I was then fortunate enough to be recruited by Northwestern Mutual. It is a diverse company in the field of financial services and wealth management, with a long history of excellence and commitment to its clients. They had a comprehensive training program, and I took full advantage of it. They also believe in giving extensive field support to new representatives, and that provided another rigorous training experience.
I have been with the company since 2008. It was a challenging time to enter the industry. I thought it was an opportunity in many ways because people were questioning what was going on in the financial world and what their financial advisors were doing. It created a way to start conversations with prospective clients. Many people were open to the story of our firm’s long-standing track record as a solid financial organization. I feel that being able to deliver on the extensive resources of our company in volatile times was a critical factor in establishing myself in the financial-services industry. I also have used my relative youth as a selling point to clients interested in retirement planning, citing the benefit of working with an advisor who will be there to guide them through what is hopefully a long and enjoyable retirement.
How has your sports background influenced your client-service philosophy?
Coaching and teaching have been ingrained in me since my childhood. Both of my parents were educators—and my father was also a coach. I further experienced the value and importance of great coaching during my college sports career. Coaching and educating became a passion. That passion permeates every interaction with our clients.
Good coaches and good teachers build and develop relationships on the foundation of trust. I believe that trust is based on two underlying traits: confidence and competence. Clients need to be confident that their advisor is working in their best interest, and advisors need to stay competent by continually seeking to learn and grow while staying on the cutting edge of financial planning. Good coaches and good teachers challenge people to perform to the very best of their abilities. Since the financial-planning process is oriented around teamwork between an advisor and his or her clients, both need to bring a focused effort to achieving outcomes-based results.
Describe your planning process.
While our company has its roots in the insurance area, the overall focus is on holistic wealth management. Just as you need a solid foundation when building a house, a financial plan provides the foundation for everything that follows for a client. Within this philosophy, we place great emphasis on risk management, both from an insurance perspective and an investment perspective. But no amount of strong portfolio planning can take precedence over the risk side of the equation. Without proper risk management, if the unforeseen happens to a family, their investment plan could also become vulnerable.
Our planning process starts with defining our relationship with the clients. What is our role, what is their role, and how do we both fit it into the process of financial planning and the client-advisor relationship? From there, we work to identify the clients’ passions and pursuits, and whether those are short-term, mid-term, or long-term goals. In the context of those objectives, we can then gather the appropriate information and data to develop a plan and design a recommended implementation strategy. Our goal is to help clients find personalized solutions that will give them the optimal opportunity to achieve their most important aspirational goals. While the plan necessarily is defined in financial terms, it is not just about managing their wealth—it is also about how that will impact their important life goals moving forward.
What is your broad approach to investment and distribution planning for retirement clients?
Everything starts with the financial-planning process and the client’s objectives. We need to identify all of the factors I have spoken of in the context of their current assets, time frame, risk profile, and goals. We use a time-weighted asset-allocation approach to planning for retirement-income distribution. We couple this with strategic asset allocation in a tax-efficient manner that manages short-term market volatility. We want to help mitigate the behavioral mistakes that clients tend to make that can derail their retirement plan. That is why risk management is so important both in insurance planning and investment planning.
Time-weighted asset allocation involves several sophisticated concepts in trying to help clients progress toward income goals within an investment framework that (a) manages risk appropriately throughout the course of their retirement and (b) delivers the risk-adjusted returns required to fund those income needs. An important goal of this framework from a distribution perspective is trying to avoid having to sell an asset at a loss to generate income. We will sell assets for tax-loss harvesting or if that makes strategic or tactical sense—we do not want to do it to fund income.
It’s crucial to create a plan that aligns with our clients’ time frames, risk tolerance, and values. We use different investment objectives for different time frames to meet their unique retirement income objectives. We recently set up a plan for a retired couple so they had liquidity (cash or cash equivalent) for the next three years of retirement income while continuing to build wealth for future years. In years four to nine of the plan, we moved to a more conservative investment model with a heavier exposure to fixed income. In years 10 to 14, the clients still have the potential to see one to two market cycles, so we could continue to recommend equity exposure because client assets have time to recover in the event of a downturn. From year 15 on, we can be as aggressive as appropriate for the clients’ plan, knowing that, historically, investment assets have fully recovered from even the steepest drawdowns during that period. This planning methodology is designed to have a cascading effect, with later time frames funding earlier time frames on a rolling basis for these clients.
“Good coaches and good teachers build and develop relationships on the foundation of trust.”
The actual investment strategies used are driven by a specific client’s plan. In the broadest sense, we might use a blend of passive and active strategies, and may use third-party managers for the active strategies. The advantage of a third party is the efficiency in outsourcing research at times to a trusted organization so that we can focus more on the client relationship and the planning strategies. In identifying third-party investment managers, we use a rigorous filtering process that includes five key criteria: (1) high money-management conviction, meaning they put their firm’s money to work in their strategies; (2) track record and tenure in the industry; (3) low quartile expense ratio; (4) high upside capture, relevant to their strategies and benchmarks; and (5) low downside capture, also within the appropriate context. We are pleased to use the resources of such firms that can deliver against these parameters.
Why do you think a prospective client should consider your firm?
Today, clients struggle to maintain balance between saving for tomorrow while still living for today. That balancing act can create anxiety and lead to inaction. I think clients are looking for a trusted financial advisor that can work with them to build a plan that helps them spend their life both living for today while still planning effectively for tomorrow. By delivering our services in a highly professional, knowledgeable, and client-centric fashion, we think we can be the coach that helps them progress toward that balance in their lives.
Reinforcing client relationships with multi-channel communication
Tyler Holden, of Holden Financial Group, places great importance on employing cutting-edge financial-planning practices and coaching his clients toward achieving their financial goals. This can only be possible, he says, through building strong client relationships using multiple points of contact, such as the following:
- Scheduling regular client review sessions and setting new appointments at the close of each review meeting.
- Providing monthly market commentary to clients and personalized messaging for milestone events.
- Using compliance-approved educational communications through social media channels.
- Hosting client-appreciation events and targeted educational seminars.
- “Quarterbacking” the coordination with clients’ other trusted advisors on a regular basis.
Tyler Holden is a wealth-management advisor at Holden Financial Group, based in Greenwood Village, Colorado. Mr. Holden’s firm provides a comprehensive offering of products and services to his clients, including financial planning; retirement and investment planning; strategies for funding education; and a variety of insurance services, including life insurance, disability income, long-term-care planning, and annuities.
A native of Colorado, Mr. Holden was a talented athlete in several sports. He played football for a nationally ranked high school team and was recruited by the University of Wyoming, where he started for three years as a wide receiver. Mr. Holden earned a Bachelor of Arts degree in communication and was a three-time Academic All-Mountain West Conference award winner, earned Academic All-District his senior year, and was elected into the inaugural class of the National Football Foundation Hampshire Honor Society.
Following college, Mr. Holden pursued his love of sports by working in sports broadcasting. He says he decided “family comes first,” and a life on the road was not attractive as a long-term career. He seized the opportunity to join Northwestern Mutual in 2008, where he says he enjoys employing his talents in coaching and teaching on behalf of his clients. He is an active member of the National Association of Insurance and Financial Advisors (NAIFA) and the Million Dollar Round Table (MDRT), earning award recognition from both organizations.
Mr. Holden and his wife of 10 years have three children and live in the Denver metro area. Mr. Holden volunteers for his church’s sports and recreation ministry; supports Brent’s Place, which is a safe, clean home for seriously ill children and their families; and is a board member for the local branch of the Fellowship of Christian Athletes (FCA). He loves outdoor activities such as skiing, golf, and camping and “exploring the beautiful state of Colorado with the family.”
Disclosure: Tyler Ric Holden uses Holden Financial Group as a marketing name for doing business as representatives of Northwestern Mutual. Holden Financial Group is not a registered investment advisor, broker-dealer, insurance agency, or federal savings bank. Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company, Milwaukee, WI, (NM) (life and disability insurance, annuities, and life insurance with long-term care benefits) and its subsidiaries. Tyler Ric Holden is a representative of Northwestern Mutual Wealth Management Company (NMWMC), Milwaukee, WI (fiduciary and fee-based financial planning services), a subsidiary of NM and federal savings bank. All NMWMC products and services are offered only by properly credentialed representatives who operate from agency offices of NMWMC. Representative is an insurance agent of NM and Northwestern Long Term Care Insurance Company, Milwaukee, WI, (long-term care insurance) a subsidiary of NM, and a registered representative of Northwestern Mutual Investment Services, LLC (NMIS) (securities), a subsidiary of NM, broker-dealer, registered investment advisor and member FINRA and SIPC. This publication is not intended as legal or tax advice. Financial representatives do not give legal or tax advice. Taxpayers should seek advice based on their particular circumstances from an independent tax advisor. As each investor’s tax-planning needs are unique, investors should consult with their tax-planning attorney prior to implementing any tax-reduction strategy, including tax-loss harvesting.
Photography by Diane Huntress