“Clients are primarily interested in preserving what they’ve got so they don’t wake up at 2 in the morning worrying about whether they have enough assets,” says Phil Stoker, co-founder with Creg Ostler of Stoker Ostler Wealth Advisors.

Ostler chimes in: “It’s fair to say our investments are not risky. We look at getting good growth without taking a lot of risks. People rely on us for sound advice to get them through thick and thin.”

Most of their 500 or so clients are retired executives who want to keep up with inflation during their retirement years, and from an estate planning standpoint, to distribute their wealth to whomever they choose while minimizing tax consequences. The fee-based firm has assets under management of $800 million.

Stoker says clients with $3 million to invest today “don’t consider themselves to be very wealthy.” That feeling seems to kick in at $5 million.

Stoker Ostler Wealth Advisors finds most of its clients through word of mouth — referrals from other professionals, such as attorneys.

“We meet, and assuming it’s a go, we spend a lot of time listening,” Ostler says. “We want to know what their goals are, their investments, their home, their debts, etc., and we put together a plan for them. Do they want to pay for the education of their grandkids, do they want to pay off their debts by the time they retire, are there colleges or charities they want to give their money to?

“Then we recommend how much they can spend in retirement and we suggest when they can start making major gifts.”

Factors to be considered include the age and health of the individual and inflation. Most of the firm’s clients have a lifestyle goal of around $10,000 a month.

“If they don’t have enough assets to meet their goals, we have to prioritize,” Stoker says.

Today’s weakened economy has an impact on retirement and estate-planning strategies. For example, individuals planning to live in retirement off the proceeds of the sale of their house might come up short.

“We recommend selling earlier when the market is good, rather than waiting until just before retirement, when the market may be bad,” Stoker says.

The current economy makes investment planning simpler, says Paul Ahern, executive vice president and an owner of Wealth Trust-Arizona. His firm has always been focused on using alternative investments that aren’t necessarily tied to stock market results.

“We’re more about allocating assets over a wide variety of investments to spread risks,” Ahern says. “It’s unfair to compare us against the Dow Jones Industrial Average or the S&P 500, because that’s apples and oranges. Part of our unique philosophy is that we use alternative investments, like managed futures, private REITs (Real Estate Investment Trusts), and some fixed-income vehicles as a buffer for times like these.”

In a volatile market, Wealth Trust-Arizona attracts more clients.

“They’re as interested in protecting their wealth as they are in growing it,” Ahern says. “But, when times are good, more people are more interested in performance.”

When a potential client contacts Wealth Trust, a meeting is scheduled. The client brings investment statements, copies of wills and trusts, tax returns, insurance policies, and anything else that provides a clear picture of the individual’s financial status.

“We get lawyers, financial planners and CPAs, if needed, in the same room at the same time,” Ahern says.

The initial meeting usually lasts about 90 minutes, with the Wealth Trust team asking a lot of questions to determine where the client is and wants to go, and how Wealth Trust can help.

Wealth Trust, which has approximately 600 clients and manages assets totaling $650 million, is a fee-based registered investment advisory firm.

Not everyone who meets the financial requirement of having at least $1 million in liquid assets is accepted as a client. Ahern explains: “If a client says they want final say over everything, then we may have a difficult time working with them. We’re really good for clients who delegate that responsibility to us.”

Another rejected client might be one who is performance driven by market standards.

“We aren’t about chasing stock market performances,” Ahern says. “That’s a high-risk game.”

Most of their clients are concerned about how to pass on their wealth to their children, grandchildren or to charities.

“By working together with estate attorneys in the same room, we are able to map out how the assets would be divided, who gets what and when,” Ahern says. “We can attach certain strings so the kids won’t get their money in one lump. We do creative things to keep Uncle Sam from collecting a lot of taxes and keep them free from creditors who might go after kids knowing they have a lot of money.”

Ahern has this advice: “Diversify among multiple asset classes. I’m not just talking about different stock market asset classes, like international, large cap and small cap. I’m talking about managed futures, private REITs, high-quality corporate bonds and municipal bonds.”

www.stokerostler.com
www.wealthtrust-arizona.com