Stephen Baldino • Warwick, NY
Baldino & Perry Associates Inc. • Cetera Advisor Networks LLC
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Susan Perry • Warwick, NY
Baldino & Perry Associates Inc. • Cetera Advisor Networks LLC
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Proactive Advisor Magazine: Stephen and Susan, how would you describe your mission in working with clients?

Stephen: Whether it is a business client, an individual, or a couple, our role is to assist the client in articulating their goals, desires, and worries from a financial perspective. We develop strategies to help them address those objectives and concerns, taking great care to educate them on the pros and cons of various alternative courses of action. Ultimately, we implement the options that the client is comfortable with and feels best meets their short- and long-term objectives.

Our firm provides holistic financial planning. We see our model as being the conductor of the orchestra, putting together a team of professionals that we may call upon for assistance on a wide variety of issues in the financial realm, whether that involves investments, insurance, retirement plans, college planning, Medicare and Social Security planning, legacy planning, or employee benefits, to mention just some. We have much of this capability in-house, but we also work with a client’s current advisors or facilitate their engagement with our team such that clients feel confident that their financial needs are being addressed in a coordinated fashion.

Susan: I would add to that the importance we place on developing personal relationships with our clients. We work hard to ascertain a full financial and factual discovery, but we also strive to go beneath the surface. We want to understand our clients’ personalities, family situations, career and retirement goals, and what truly motivates them now and for their future aspirations. This helps tremendously in the planning process, especially in determining their risk tolerance and creating a comfortable and open atmosphere. I believe that a lot of people are insecure about their financial situation, decisions made in the past, or the depth of their financial knowledge. We want to make that a nonissue, being supportive in a way that helps them feel comfortable in opening up to us. I think we do a very good job of getting to know the full financial and personal picture of our clients.

Going beyond discovery, what is critical to your planning process?

Stephen: We believe strongly in the importance of setting goals, a thorough review of strategic options to help meet those goals, an implementation plan that is efficient, and then periodic review sessions to monitor progress toward goals. While we hope that each of our clients takes advantage of our full holistic financial-planning process, we do encounter clients who have a singular need or concern, and we are happy to assist them with that. Where we really shine, I think, is when we can bring the full resources of our internal and external professional team to bear on a client’s complete financial-planning needs.

Once clients understand what we have to offer, most engage in the more holistic approach to their overall financial health. We do that in a way comparable to a general medical practitioner bringing in a cardiologist for a patient’s heart issues. We might bring in an attorney, accountant, Social Security specialist, or other specific resource as we consider the client’s financial objectives.

Susan: One of the areas we pride ourselves on is developing a prioritized list of concrete action steps for clients. Clients, especially those facing retirement, can be overwhelmed by what they perceive to be the magnitude of getting their financial house in order and covering all the bases as they prepare for retirement. That is exactly why we are there to guide them and to break the process down into readily digestible pieces. We want to first attack what they perceive as their most pressing worry points and then systematically work through a “punch list” of priorities. I think clients feel very reassured by this type of disciplined guidance, attention to detail, and thoroughness in addressing their financial needs.

 

What is your philosophical approach to investment management?

Stephen: Let’s take the case of a couple nearing retirement and assume we have conducted a full discovery process and identified a solid list of objectives. How we then approach investment planning depends on their time frame, risk profile, and a look at what we call “fund balanced planning.” We work with the client to identify a potential level of income that they will require in retirement and the funds necessary to generate that income. We subtract out any fixed income they can depend on, such as Social Security or a fixed pension, and then determine the shortfall, if any.

Based on their asset levels, how can we best fund that shortfall? That is essentially a combination of educated assumptions around return levels and risk exposure. The smaller the shortfall, the less risk the client may assume. If the shortfall is significant, they may either need to tap into other assets, assume more risk, or reduce their income expectations in retirement. By attaching real numbers to these scenarios, a lightbulb will often turn on for the client as they start to fully grasp the variables in the equation. At times, the discussion comes down to whether the client is more risk-averse and desires a guaranteed income solution for all or part of their retirement income or is comfortable with a nonguaranteed, more traditional investment plan.

For a nonguaranteed income solution, we often look to third-party investment managers who offer actively managed strategies with a strong risk-management component. I ask clients, “Would you drive a car without brakes?” We think the same rationale holds true for their investment portfolio, which should have some level of protection in case the market enters a significant downtrend. Their hard-earned assets should not be fully exposed to the worst of potential drawdowns in a bear market scenario. While there are no guarantees, we walk clients through illustrations of how their specific portfolio allocations and strategies have performed historically.

Susan: We work with multiple third-party investment managers and providers of investment products and will design a portfolio allocation that is customized to a client’s specific needs and risk tolerance, anywhere from very conservative to very aggressive. We pride ourselves on going “above and beyond” for clients in addressing their financial concerns and providing guidance in good market times and bad. We expect the same out of the investment companies that we work with.

“We see our model as being the conductor of the orchestra, putting together a team of professionals.”

Great service is paramount to us, in the form of accessibility of information and the availability of knowledgeable and empowered company representatives. It is also very important in our process to have periodic review sessions with clients, at least annually. We review how their investment plan is performing versus their objectives, probe any changes in their life circumstances, and make adjustments if necessary. We are proud of the fact that clients will seldom call us in a panic over a short-term market move. They have been educated on their investment objectives, recognize that their portfolios are built for long-term performance, and understand that risk management is integral to our investment process.

Stephen, what do you think have been the keys to the long-term success of your practice?

Stephen: We have mentioned many of them already: a disciplined, team approach to holistic financial planning, a dedication to outstanding customer service, and building strong and deep relationships with clients. As someone who has degrees in the education field and has taught for a dozen years, I am particularly proud of our ability to communicate complex financial concepts to clients in a way that they truly understand them. Susan and I are both committed to a lifelong pursuit of knowledge and best practices in the financial field. I believe our clients recognize and appreciate our professionalism and our efforts to enhance their financial well-being.