For clients who like to know technical terms, these three sum up an investment strategy that aims for risk management and competitive returns.

Phylyp Wagner: I have been around the block more than once, and it has been an interesting journey. I started on the retail banking side, moved into selling insurance products, and then became one of the relatively early financial advisors to earn the CFP designation. I cut my teeth on not just cold-calling clients, but literally “cold-knocking” on the doors of prospects in the Washington area.

The financial world has gone through many iterations since I started in the business. The universal school of thought back when I began managing client investments was plain vanilla. It was all about basic asset allocation theory, diversifying among a few mutual funds, and perhaps some dividend reinvestment approaches.

Now, we see our planning firm as having three basic disciplines, and each discipline has multiple subsets. One discipline is investment advisory work, where we manage roughly a quarter of a billion dollars. The second discipline is risk management. And then the third discipline is alternative investments.

Everything that is in those three disciplines existed in some place during the evolution of financial planning, but it was a slow process to be able to pull everything together as an independent advisor. However, it is fundamental to our firm to be able to integrate all of those processes to create comprehensive and forward-looking financial planning.

You can’t just be an investment advisor; you also have to protect people’s livelihoods with life insurance. You have to give them permanent income opportunities through very sophisticated variable annuities, and ensure that health-care needs will be covered with long-term care and disability protection. Financial planning and wealth management is not just about managing investments—important as that is—but offering clients an integrated approach across all of their financial and risk management needs.

Matt Quattlebaum: We take a multi-strategy approach, and this definitely has evolved over the years. We manage client money primarily through third-party managers. Regardless of the investment approach for our clients, we want to make sure that everything we recommend is best-in-class, so we seek managers that stand apart from their peers in whatever strategy type they are utilizing.

We often recommend to clients what we call “tactical constrained strategies,” where the broad objective is to participate in market movements with an emphasis on risk management. We look for favorable risk-adjusted returns over longer-time-frame market cycles with this approach. These strategies reflect whatever risk mandate we agree to with a specific client or couple.

Our firm has also evolved toward offering what we call more “unconstrained strategies,” which can work within the context of a well-diversified portfolio. These strategies have the ability to make money in both up and down markets, and are more tactical and proactive in approach.

We still firmly believe in diversification and think there is a place in most clients’ portfolios for several elements that can work well in any market environment—versus traditional strategies that can only profit when the market is going up. Different parts of the portfolio will react differently based on market conditions, with the unconstrained having the ability to get more aggressive in strong bull markets, and defensive, or even inverse the market, during bear markets.

Phylyp: Managing money is a very intense discipline that needs to be exclusive and focused. When I’m visiting with clients, talking to them about how to best use all of these financial-planning and investment approaches that fit their needs, I obviously cannot be sitting in front of a computer tracking the market. That is what sophisticated models and algorithms are for.

To use a simple analogy, the person who sells a high-end, sophisticated automobile and introduces a client to its features is probably not the guy who builds the car. But if he’s doing the job correctly, he knows all of the components that go into the car and recognizes how to get the best performance out of it. We exclusively use the independent investment advisory platforms to achieve what we think is the best investment solution for our clients—and that can sometimes be a blend of different strategies.

Matt: We really want to look hard at the process they employ. The track record of performance is certainly important, but getting comfortable with the investment process of the company is more important. Do they have a sustainable process that has been implemented for some time?

Backtested results can be important, as strategies do change and evolve, but we need to ascertain their actual track record as well. No manager is going to consistently beat the market, or even their best-fit benchmark every year, but that is not the single criteria we are looking for. We are very interested in their pedigree, the quality of their people, the soundness of their approach, and the consistency with which they implement what they are trying to do.

Phylyp: One of the key components to building a successful financial-planning practice is to be the quarterback of the process, showing leadership and clear direction. My strength is in being able to explain complicated financial-planning processes in simple language and to motivate people to take action.

We want our clients to have a clear and realistic set of expectations and part of that is demystifying Wall Street gibberish. I tell clients that there are only three technical terms they need to know and then explain as simply as possible the concepts of alpha, beta, and R-squared. When I am done, they usually have a good idea of what we are trying to achieve: managing risk within their portfolios while trying to achieve competitive returns.

There is one thing I have learned for certain over my years running a successful firm. Clients pretty quickly understand that you have the technical expertise to deliver for them. But they care far less about what you know than with knowing that you care. We do—and, thankfully, we have turned that into a very robust client roster and a high level of client satisfaction with our services.