John McGonagle, CFP, CRPC • Northville, MI
Asset Architects LLC
I learned from a mentor a long time ago that we are really not just in the investment-services business, we are in the investment-services marketing business. I do not mean that in the obvious sense that we are trying to sell product or services, but rather we are constantly trying to present objective and complete information to clients to help them make the most informed decisions. That is marketing to me, as informed clients become better consumers of financial products and services.
Related to this concept, active investment management through third-party money managers has become a differentiator for my practice. It represents a relatively new solution to market volatility, smoother returns over time, and capital preservation—directly addressing the concerns many clients are facing. They may not know it by name at first, but once they understand its principles, they tend to become “advocates” and help spread the word to new prospects for our practice.
I explain to clients that third-party active managers fit in perfectly with my “five Ts” of any successful business endeavor: time, temperament, technology, training, and trust.
There is the importance of allocating adequate “time” to perfect something, and these managers are full-time market strategists and analysts—that is all they do. There is “temperament”—most individual investors, and even advisors, are too easily swayed by emotions and headlines. Active managers take emotion out of the equation through systematic decision-making. “Technology” is obviously the strong suit of strategies that are quantitatively-based. “Training” relates to how these managers consistently apply their discipline to their decision-making—it needs to be a repeatable process. And, finally, there is “trust”—which is my responsibility in doing extensive due diligence with any manager I would recommend for a client.
Disclosure: Advisory services offered through EPI Advisors LLC, a MI registered investment advisor.
Photography by Tom McKenzie
