Helping clients manage their investments isn't easy even in the best of times - and the last few years have certainly not been the best of times for investment portfolios.

For the CPA financial advisor who is involved in guiding a client's investment choices, the ups and downs (mostly downs) of the recent past certainly haven't made their job any easier. In the face of jittery markets, increased volatility and, most important, plunging values, keeping clients on track to their financial goals requires a mix of confidence in the soundness of previously established plans and flexibility in the face of unprecedented changes, to say nothing of a certain amount of firmness.

Fortunately, much of the worst of the recession is behind us, and investors in general seem to be growing more comfortable, and less likely to panic.

A recent survey of 1,001 investors by the Center for Audit Quality found that 68 percent of respondents had at least some confidence in the U.S. capital markets - still off from 2007's pre-recession 84 percent, but in line with a "new normal" level of confidence around 70 percent. Encouragingly, confidence was higher among respondents with more than $100,000 to invest, at 74 percent.

Better still, of respondents who use a financial planner, advisor or broker, 86 percent found their advice at least somewhat useful, and close to half (46 percent) found it very useful.

That level of influence has helped CPA financial advisors help their clients to stick to their investment strategies.


BDMP Wealth Management, for instance, "has not altered investment strategies on a global basis in the wake of the recent economic downturn," said Barbara Appleby, a principal at the Portland, Maine-based affiliate of CPA firm Berry Dunn McNeil & Parker.

Nor has Citrin Cooperman Wealth Management: "We generally adhere to Modern Portfolio Theory, and we are not so-called 'market timers,'" said David Bruckman, managing director at the firm, which has offices in New York, New Jersey and Philadelphia. "While we make adjustments to clients' portfolios, modify a client's target asset allocation or change specific investments, the recent downturn, if anything, reinforced our belief in the soundness of diversification."

Jack Gibbs, president of Fortress Financial Group, in Ashland, Ore., reported that they haven't changed their investment strategies in reaction to the recession: "We believe that the expected time frame for using the money should be the main driver for the investment allocation decision."

Having a strong, coherent investment strategy in place can certainly help keep clients in line, but it doesn't hurt if they keep a cool head.

"In general, our clients, though certainly concerned, have not panicked," reported BDMP's Appleby. "Only a few have put all their invested assets in cash or other fixed-income vehicles. Many have reduced the percentage of equities in their portfolios, often based on our recommendations, as the market recovered."

While Gibbs noted that some of Fortress Financial's clients are hesitant to deploy new cash, "Others see [the downturn] as just another opportunity to build positions in quality long-term investments."

At Citrin Cooperman, "The majority of our investment clients have equity positions limited to less than 60 percent of their liquid investments, and have not expressed concern or panic," Bruckman said. On the other hand, "Some clients, understandably, have reacted to falling bond yields with concern and frustration."


Sticking to a plan, however, does not mean being inflexible, or ignoring your clients' needs or the realities of the market. Occasional portfolio adjustments and asset re-allocations should be allowed for in any financial plan - provided there's a good reason.

Fortress Financial's Gibbs noted that he is "shifting client portfolios to some extent in advance of new tax laws," and increasing income-generating investments inside client retirement accounts, while reducing them in other accounts.

BDMP, meanwhile, is in touch with its clients and prepared to make changes where necessary. "We have revisited individual risk tolerance with each of our clients," Appleby said. "For clients who are drawing on invested assets, or those who will begin to do so soon, we have re-evaluated cash flow needs and frequently increased cash and other short-term positions. In some instances, we have proactively recommended that clients reduce the level of risk to which they are exposed."

While the firm has not explored investment strategies that it hadn't been using before the downtown, she did note that it was "more inclined now to use alternative investments than we did before," including private (not publicly traded) real estate investment trusts, and managed futures.


If the markets can make sticking to an investment plan difficult through volatility and disappointing returns, they can also make it easier to implement a plan by providing new investment vehicles - though these have to be carefully examined.

"We have not changed our investment strategy," said Citrin Cooperman's Bruckman. "We always, however, explore new investments. If there is an investment vehicle on the market that is suitable for a client and can help the client, we need to know about it." He explained that the firm learns about new investment vehicles through networking, seminars, continuing education, and industry publications.

While BDMP Wealth Management is not actively looking for new investment vehicles, Appleby said that they do "pay attention to what is available. All alternative investments that we consider are first vetted by our independent broker-dealer." The firm then does its own independent evaluation to determine its comfort level with the investment - and then evaluates its appropriateness for each specific client on a case-by-case basis.

Fortress Financial's Gibbs "rarely" takes up new investment vehicles: "Most 'new' things are simply twists on older things." That does not mean, however, that he doesn't stay on top of new offerings - or adopt them if they prove useful.

"Some of the newer things I have embraced to a larger extent over the past 10 years include income guarantee contracts and exchange-traded funds," he noted.

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