“One must have a reasonable optimism,”
Milton S. Hershey, the founder of the famous chocolate company, once said. “It is the force that makes the world go.”
We all want to be optimistic about our future. For some, however, that optimism is based on wishful thinking or simply a positive disposition. But a positive disposition alone will not carry you to your destination; rather, it is an alignment of your plans and actions that will get you to the target you are optimistically hoping to hit. This is where optimism must intersect with reasonableness.
For Justin Connors of Connors Wealth Management, helping clients be reasonable and optimistic about their future is what he has dedicated his life to.
“What people are seeking is peace of mind. We recognize that comes from being informed and setting realistic and achievable goals for their future,” he explained. “Our clients are usually fairly conservative and don’t expect to make inflated returns on their portfolio, nor are they willing to accept big market losses. Basically, they want to ensure they can maintain their lifestyle and not run out of money.”
When it comes to our retirement years, everyone wants to enjoy the opportunity to pursue long-postponed personal interests, such as travel or time with friends and family. What is more, on average, people are living far longer than ever, and that longevity continues to grow. Great, right?
With the addition of more of those vibrant, healthy years to relish, many people’s financial resources are not positioned to underwrite the life and lifestyle they have anticipated for as long as it may be. Also, the cost of healthcare, which is helping make that longevity possible, continues to rise at a rate that may far outpace inflation and income. One other factor: more and more individuals are dependent on positioning their own funds to pay for their retirements as company pensions go the way of the dinosaur, so protecting their irreplaceable retirement capital has become much more essential.
Finding the Right Fit
“Our client base falls into the ‘Millionaire Next Door’ profile,” said Connors, referring to a bestselling book published in 2010 by two PhDs that showed the majority of millionaires in America are not in Beverly Hills or on Park Avenue. Rather, they live simply, in average neighborhoods, and have accumulated their wealth through hard work and thrift.
“We help them understand we’re in one of the longest market cycles since World War II, having passed the market cycle of the 90’s,” said Connors. “Typically, the longer and higher these cycles go, the harder they tend to fall. Our goal is to position our clients not to ride the highs so they don’t incur big losses during market corrections.”
“What people are seeking is peace of mind. We recognize that comes from being informed and setting realistic and achievable goals for their future.”
Instead, Connors’ approach is to tell clients what they need to hear, not necessarily what they want to hear, about market realities… then prepare and position them, long-term, for these market fluctuations. This means carefully determining their risk tolerance in investments and sometimes making reasonable lifestyle adjustments to live within their budgets in order to maximize their long-term sustainability.
To do this, Connors uses sophisticated computer models that help show potential performance based on historic trends. “A client may see themselves as being risk tolerant,” he said, “but when you run the risk assessment and ask if they would be comfortable with that level of loss, it often changes their self-evaluation.”
Therefore, Connors recognizes that his relational fit with his clients and their fit with his firm must be carefully determined up front. “I can’t tell you how many people I’ve met with and, even though they were high-net worth individuals, their return expectations weren’t in alignment with their risk tolerance, so we decided we weren’t a good fit,” he said. “It’s best for the client and us to recognize this as early in the relationship as possible.”
The Relational Component
Connors has created a pretty clear profile of his prototypical client in terms of net worth, along with client expectations and their willingness to accept advice. “We on board people after an in-depth evaluation of their financial situation along with their long-term goal assessment so we can set reasonable and achievable expectations,” he explained. “This is turned into a plan of action, which we constantly monitor and review with the client quarterly.”
It is the deep relational connection his team makes that he feels is their differentiator. “We treat our clients like family; there is no length we won’t go to answer a question or help them with a concern or challenge.”
Connors Wealth insists on quarterly meetings with clients. In addition, they hold gatherings throughout the year that combine the opportunity to socialize so that the team and clients can get to know each other better, while also featuring an important educational component.
Where that would be enough for most firms, Connors goes further. “I like being an independent advisor,” he said. “It enables me to be completely transparent about our fee structure, while also investing where my clients’ interests are best served, not based on firm or shareholder goals.”
This focus has led to an a partnership with Marine Bank, in which Connors could send clients for loans and debt service, and the bank could comfortably refer clients to him for wealth management services.
“Large investment firms typically have a banking component, and I wanted a partnership that could meet that need, as did Bill Penney at Marine Bank,” Connors said.
The firm has a full-service feel, covering all major financial needs clients face. As Connors likes to say, “We like to be all things to a few people.”
Looking at the larger picture, although their company is called Connors Wealth Management, the firm’s primary product is not financial or investment advice. It is much simpler — peace of mind.