Trish Beine • Greenfield, WI
ClearStep Financial • Harbour Investments Inc.

Like the rapid advances in the delivery of entertainment and music to consumers, technology can make a good thing even better. Modern investment strategies and tools provide a level of sophistication required by today’s financial markets.

Proactive Advisor Magazine: Trish, could we talk a little about your background?

I grew up in the beautiful Monroe area of Wisconsin on an active dairy farm. I think I learned through that experience the values of diligence, hard work, and patient persistence. I earned a scholarship to college, studied business finance and went on to work for several years in the banking industry. I have been in the business since the early 2000s, and I am now a financial advisor with Harbour Investments Inc. and market through ClearStep Financial. That was a smart career choice, and every day is a pleasure working with the management and clients of our firm.

What do you most enjoy about being a financial advisor?

I like helping people honestly face and take action to solve their financial issues. After the market downturns and recessions we have had since 2000, a lot of people have felt like they were trapped in a “burning building.” While it is easy to understand that feeling, a calm and rational approach to financial planning and investments can make a huge difference in people’s lives. I believe our firm can make a difference in how clients address their financial issues, as well as in the practicalities of sound strategies and implementation. That is very rewarding to me.

“Financial tools have changed. What may have been appropriate in the past is not necessarily in tune with the times today.”

How do you approach the implementation phase in terms of investments?

Let’s assume we have completed the financial-planning stages and have reached the recommendation and implementation phase. If we recommend that it is appropriate for a client to have an investment allocation for their longer-term assets, I will help them select professional third-party asset managers whose investment philosophies and strategies are consistent with their specific objectives and risk tolerance.

We have access to several third-party active managers and can use them individually or in combination. We recommend them based on several factors: their overall strategic philosophy, their track record, their service and platform, and their success in implementing their specific strategic vision.

These are highly skilled professionals who do nothing but manage money all day long and are watching many technical aspects of the markets and different sectors and asset classes. These managers are operating within rigorous predetermined guidelines matched to a client’s risk profile. From a total portfolio perspective, their combined approaches attempt to fit a client’s specific personal profile as an investor.

Do clients understand the concepts of managed money and active management?

Education is a big part of what we do, and the levels of financial sophistication can be all over the map. I talk with almost everyone about how the investment world has evolved over time. Just like the digital world or communications or entertainment, the financial world has changed rapidly over the last 20 years. I ask clients if they are still using their eight-track tapes to listen to music, and of course, the answer is no. It is the same thing with investments in the sense that financial tools have changed. What may have been appropriate in the past is not necessarily in tune with the times today.

Technology continues to evolve rapidly, and the world is more interconnected than ever, making sophisticated modern investment tools mandatory. Static allocations to asset classes may have worked fine at one time, but that approach may not offer the flexibility and responsiveness we believe is needed to best handle risk mitigation during the types of market stress we have seen in the 2000s—and will surely see again.

We have access to professional third-party managers that can make adjustments in real time. I sometimes use a horse racing analogy with clients, not that I would ever recommend that anyone bets on the horses! I ask clients to imagine they were at the races and had a choice of placing a final bet before the race started or having the ability to change their wager at each furlong post as the race unfolds—which would they choose to do? That is similar to the way active managers can adjust to market conditions as they develop in a very systematic and quantified fashion.

What are the most important criteria for you in selecting a third-party active manager?

Our firm looks very deeply into all aspects of a manager in terms of their history, track record, strategies, and philosophy. But I would say it is a combination of the pragmatic and the philosophical. Each manager that we use has an area of focus or something that differentiates their approach, so that is the broad strategic picture we will look at and how that will fit in with our clients’ portfolios. But the pragmatic is important as well. How good are they at executing their strategies? How are they at reporting and in terms of ease of doing business? Is the leadership of their company stable? These are the kinds of things we also consider.

Has there been any change in client attitudes over the past five years?

It is really so dependent on the client or client couple and their specific circumstances. Our firm has many clients who weathered the financial crisis in fine shape. A good deal of credit has to go to our active managers who employed risk-mitigation measures and avoided much of the worst of the market declines in 2008 and 2009.

Other clients who are newer to the firm are often afraid of investing in equities at all. They may have sold their portfolios on the way down or at the bottom and are very hesitant even now to get back in. That is where the education piece comes in and explaining the core concepts of active money management. Our firm certainly does not have a crystal ball as to future market direction, but we collectively do have a sophisticated set of investment models, many approaches to diversification, and strong risk-management tools. That is an important concept to communicate clearly, and it helps risk-averse clients see that they can still participate in equity markets as appropriate for their objectives.

I liken it to the tortoise and the hare story. Risk-managed strategies will not always deliver the highest returns in strong bull markets, but they also will generally not see the worst declines in poor market conditions. Creating this smoother ride for clients over the long run and keeping their overall financial plan on track has definitely helped to fortify my client relationships. Helping clients work toward their financial goals is an amazing opportunity and responsibility, and it makes my career very rewarding.