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“If you perceive a contradiction, check your premises…” Ayn Rand Atlas Shrugged

"Presenting the Wealthcare Value Proposition - Do You Perceive a Contradiction?" William B. Akers, CWA VP Financeware, Inc. Wealthcare Capital Management. “Everything that can be invented has been invented…” Charles H. Duell Commissioner, U.S. patent office, 1899.

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“If you perceive a contradiction, check your premises…” Ayn Rand Atlas Shrugged

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  1. "Presenting the Wealthcare Value Proposition - Do YouPerceive a Contradiction?"William B. Akers, CWA VP Financeware, Inc.Wealthcare Capital Management

  2. “Everything that can be invented has been invented…”Charles H. DuellCommissioner, U.S. patent office, 1899 “If you perceive a contradiction, check your premises…” Ayn RandAtlas Shrugged

  3. “Everything that can be invented has been invented…”Charles H. DuellCommissioner, U.S. patent office, 1899 “If you perceive a contradiction, check your premises…” Ayn RandAtlas Shrugged • We know the best practices…-Have they all been invented already? • Should we just execute the steps of the best practices? • How has the market responded to our best practices? • MPT is more than 50 Years Old…Modern or Antique? • Do we perceive any contradictions?

  4. What does it take for ANY product or service to be successful? • 1- Meet Target Market NEED or DESIRE • We do not VOLUNTARILY spend money for something we don’t need or want • 2- Easy to Use & Understand – CONVENIENT • We do not seek to complicate our lives for things we do not understand • 3- Reasonably Reliable…A “Good” Product • Too unreliable = Doesn’t deliver as promised = ultimate failure

  5. What does it take for ANY product or service to be successful? • 1- Meet Target Market NEED or DESIRE • We do not VOLUNTARILY spend money for something we don’t need or want • 2- Easy to Use & Understand – CONVENIENT • We do not seek to complicate our lives for things we do not understand • 3- Reasonably Reliable…A “Good” Product • Too unreliable = Doesn’t deliver as promised = ultimate failure

  6. What does it take for ANY product or service to be successful? • 1- Meet Target Market NEED or DESIRE • We do not VOLUNTARILY spend money for something we don’t need or want • 2- Easy to Use & Understand – CONVENIENT • We do not seek to complicate our lives for things we do not understand • 3- Reasonably Reliable…A “Good” Product • Too unreliable = Doesn’t deliver as promised = ultimate failure

  7. What does it take for ANY product or service to be successful? • 1- Meet Target Market NEED or DESIRE • We do not VOLUNTARILY spend money for something we don’t need or want • 2- Easy to Use & Understand – CONVENIENT • We do not seek to complicate our lives for things we do not understand • 3- Reasonably Reliable…A “Good” Product • Too unreliable = Doesn’t deliver as promised = ultimate failure • Have we ever examined financial services “best practices” from the criteria that ANY product or service MUST HAVE to make it? • Do our best practices MEET A TARGET MARKET NEED/DESIRE? • Are they EASY & CONVENIENT? • Are they RELIABLE?

  8. -Meet Need/Desire? -Easy to Understand… Convenient? -Good/Reliable? Examine the “best practices” of:Financial Planning & Investment Consulting • 1- Obtain Complete Financial Profile • 2- Determine Financial Goals • 3- Identify Risk Tolerance • 4- Optimize Asset Allocation(highest return for risk tolerance) • 5- Establish Performance Benchmarks • 6- Project Future Resources Based on Conservative Assumptions • 7- Determine Savings Shortfall-“Gap” • 8- Search for Best Funds/Managers Based on Policy • 9- Monitor Performanceand Update Plan “Regularly”

  9. -Meet Need/Desire? -Easy to Understand… Convenient? -Good/Reliable? Examine the “best practices” of:Financial Planning & Investment Consulting • 1- Obtain Complete Financial Profile • 2- Determine Financial Goals • 3- Identify Risk Tolerance • 4- Optimize Asset Allocation(highest return for risk tolerance) • 5- Establish Performance Benchmarks • 6- Project Future Resources Based on Conservative Assumptions • 7- Determine Savings Shortfall-“Gap” • 8- Search for Best Funds/Managers Based on Policy • 9- Monitor Performanceand Update Plan “Regularly”

  10. Do You Perceive a Contradiction to:Meeting a Target Market Need or Desire? • How Much Pain Can You Bear? • Position You To Experience It • Sacrifice Your Lifestyle…SAVE MORE& RARELY Less • Tell You What Happened…Evade What it Means to You…Go to Doctor AFTER YOUARE DEAD! • 1- Obtain Complete Financial Profile • 2- Determine Financial Goals • 3- Identify Risk Tolerance • 4- Optimize Asset Allocation(highest return for risk tolerance) • 5- Establish Performance Benchmarks • 6- Project Future Resources Based on Conservative Assumptions • 7- Determine Savings Shortfall-“Gap” • 8- Search for Best Funds/Managers Based on Policy • 9- Monitor Performance and Update Plan “Regularly”

  11. Do You Perceive a Contradiction to:Meeting a Target Market Need or Desire? • How Much Pain Can You Bear? • Position You To Experience It • Sacrifice Your Lifestyle…SAVE MORE& RARELY Less • Tell You What Happened…Evade What it Means to You…Go to Doctor AFTER YOUARE DEAD! • 1- Obtain Complete Financial Profile • 2- Determine Financial Goals • 3- Identify Risk Tolerance • 4- Optimize Asset Allocation(highest return for risk tolerance) • 5- Establish Performance Benchmarks • 6- Project Future Resources Based on Conservative Assumptions • 7- Determine Savings Shortfall-“Gap” • 8- Search for Best Funds/Managers Based on Policy • 9- Monitor Performance and Update Plan “Regularly”

  12. Do You Perceive a Contradiction to:Meeting a Target Market Need or Desire? • How Much Pain Can You Bear? • Position You To Experience It • Sacrifice Your Lifestyle…SAVE MORE& RARELY Less • Tell You What Happened…Evade What it Means to You…Go to Doctor AFTER YOUARE DEAD! • 1- Obtain Complete Financial Profile • 2- Determine Financial Goals • 3- Identify Risk Tolerance • 4- Optimize Asset Allocation(highest return for risk tolerance) • 5- Establish Performance Benchmarks • 6- Project Future Resources Based on Conservative Assumptions • 7- Determine Savings Shortfall-“Gap” • 8- Search for Best Funds/Managers Based on Policy • 9- Monitor Performance and Update Plan “Regularly”

  13. Do You Perceive a Contradiction to:Meeting a Target Market Need or Desire? • How Much Pain Can You Bear? • Position You To Experience It • Sacrifice Your Lifestyle…SAVE MORE& RARELY Less • Tell You What Happened…Evade What it Means to You…Go to Doctor AFTER YOUARE DEAD! • 1- Obtain Complete Financial Profile • 2- Determine Financial Goals • 3- Identify Risk Tolerance • 4- Optimize Asset Allocation(highest return for risk tolerance) • 5- Establish Performance Benchmarks • 6- Project Future Resources Based on Conservative Assumptions • 7- Determine Savings Shortfall-“Gap” • 8- Search for Best Funds/Managers Based on Policy • 9- Monitor Performance and Update Plan “Regularly”

  14. CONTRADICTION? Do You Perceive a Contradiction to:Meeting a Target Market Need or Desire? • CONTRADICTION? • How Much Pain Can You Bear? • Position You To Experience It • Sacrifice Your Lifestyle • Tell You What Happened…Evade What it Means to You • 1- Obtain Complete Financial Profile • 2- Determine Financial Goals • 3- Identify Risk Tolerance • 4- Optimize Asset Allocation(highest return for risk tolerance) • 5- Establish Performance Benchmarks • 6- Project Future Resources Based on Conservative Assumptions • 7- Determine Savings Shortfall-“Gap” • 8- Search for Best Funds/Managers Based on Policy • 9- Monitor Performance and Update Plan “Regularly”

  15. CONTRADICTION? Do You Perceive a Contradiction to:Easy To Use? Understand? Convenient? • Insurance, Budgets, Benefits…What do Millionaires Spendon Cable Bills? • Retirement, Education, Estate=R1000 Growth/Mid Cap Value • Loaded With Jargon…Greek Literally Greek…Alpha/BetaCLIENT MUST SPEAK OUR LANGUAGE (INSTEAD OF US SPEAKING THEIRS) & WASTE TIME ON MEANINGLESS DETAILS • 1- Obtain Complete Financial Profile • 2- Determine Financial Goals • 3- Identify Risk Tolerance • 4- Optimize Asset Allocation(highest return for risk tolerance) • 5- Establish Performance Benchmarks • 6- Project Future Resources Based on Conservative Assumptions • 7- Determine Savings Shortfall-“Gap” • 8- Search for Best Funds/Managers Based on Policy • 9- Monitor Performance and Update Plan “Regularly”

  16. CONTRADICTION? Do You Perceive a Contradiction to:Easy To Use? Understand? Convenient? • Insurance, Budgets, Benefits…What do Millionaires Spendon Cable Bills? • Retirement, Education, Estate=R1000 Growth/Mid Cap Value • Loaded With Jargon…Greek Literally Greek…Alpha/BetaCLIENT MUST SPEAK OUR LANGUAGE (INSTEAD OF US SPEAKING THEIRS) & WASTE TIME ON MEANINGLESS DETAILS • 1- Obtain Complete Financial Profile • 2- Determine Financial Goals • 3- Identify Risk Tolerance • 4- Optimize Asset Allocation(highest return for risk tolerance) • 5- Establish Performance Benchmarks • 6- Project Future Resources Based on Conservative Assumptions • 7- Determine Savings Shortfall-“Gap” • 8- Search for Best Funds/Managers Based on Policy • 9- Monitor Performance and Update Plan “Regularly”

  17. CONTRADICTION? Do You Perceive a Contradiction to:Easy To Use? Understand? Convenient? • Insurance, Budgets, Benefits…What do Millionaires Spendon Cable Bills? • Retirement, Education, Estate=R1000 Growth/Mid Cap Value • Loaded With Jargon…Greek Literally Greek…Alpha/BetaCLIENT MUST SPEAK OUR LANGUAGE (INSTEAD OF US SPEAKING THEIRS) & WASTE TIME ON MEANINGLESS DETAILS • 1- Obtain Complete Financial Profile • 2- Determine Financial Goals • 3- Identify Risk Tolerance • 4- Optimize Asset Allocation(highest return for risk tolerance) • 5- Establish Performance Benchmarks • 6- Project Future Resources Based on Conservative Assumptions • 7- Determine Savings Shortfall-“Gap” • 8- Search for Best Funds/Managers Based on Policy • 9- Monitor Performance and Update Plan “Regularly”

  18. CONTRADICTION? Do You Perceive a Contradiction to:Easy To Use? Understand? Convenient? • Insurance, Budgets, Benefits…What do Millionaires Spendon Cable Bills? • Retirement, Education, Estate=R1000 Growth/Mid Cap Value • Loaded With Jargon…Greek Literally Greek…Alpha/BetaCLIENT MUST SPEAK OUR LANGUAGE (INSTEAD OF US SPEAKING THEIRS) & WASTE TIME ON MEANINGLESS DETAILS • 1- Obtain Complete Financial Profile • 2- Determine Financial Goals • 3- Identify Risk Tolerance • 4- Optimize Asset Allocation(highest return for risk tolerance) • 5- Establish Performance Benchmarks • 6- Project Future Resources Based on Conservative Assumptions • 7- Determine Savings Shortfall-“Gap” • 8- Search for Best Funds/Managers Based on Policy • 9- Monitor Performance and Update Plan “Regularly”

  19. CONTRADICTION? Do You Perceive a Contradiction to:Easy To Use? Understand? Convenient? CONTRADICTION? • Insurance, Budgets, Benefits…What do Millionaires Spendon Cable Bills? • Retirement, Education, Estate=R1000 Growth/Mid Cap Value • Loaded With Jargon…Greek Literally Greek…Alpha/BetaCLIENT MUST SPEAK OUR LANGUAGE (INSTEAD OF US SPEAKING THEIRS) & WASTE TIME ON MEANINGLESS DETAILS • 1- Obtain Complete Financial Profile • 2- Determine Financial Goals • 3- Identify Risk Tolerance • 4- Optimize Asset Allocation(highest return for risk tolerance) • 5- Establish Performance Benchmarks • 6- Project Future Resources Based on Conservative Assumptions • 7- Determine Savings Shortfall-“Gap” • 8- Search for Best Funds/Managers Based on Policy • 9- Monitor Performance and Update Plan “Regularly”

  20. CONTRADICTION? Surely Our “Conservative” Projections Are Reasonably Reliable In Meeting Clients Goals… • 1- Obtain Complete Financial Profile • 2- Determine Financial Goals • 3- Identify Risk Tolerance • 4- Optimize Asset Allocation(highest return for risk tolerance) • 5- Establish Performance Benchmarks • 6- Project Future Resources Based on Conservative Assumptions • 7- Determine Savings Shortfall-“Gap” • 8- Search for Best Funds/Managers Based on Policy • 9- Monitor Performance and Update Plan “Regularly”

  21. Current “Best Practices”Identify risk tolerance, optimize asset allocation, & do a financial plan... • For Example, Harry Abernathy... • 54 Year Old, $900,000 Portfolio, Saving $16,000 a year, Retiring at 61 with a retirement income goal of $112,500 - • Projected Portfolio Values at age 94 based on??? • 10 Yr Return of 15.2%? 20 Yr Return of 15.8%? • 40 Year 12.23%?$23 Million Estate….CRATS, CRUTS, and ILITs !! • Market Reality: • Actual Market at 12.23% (’60-’99): Actual Results: Broke @ Age 85 $1.5 Million Actual Market at 12.09% (’61-’00): $5.7 Million Actual Market at 9.79% (’35-’74): “BEST” Practice OR MALPRACTICE?

  22. Current “Best Practices”Identify risk tolerance, optimize asset allocation, & do a financial plan... • For Example, Harry Abernathy... • 54 Year Old, $900,000 Portfolio, Saving $16,000 a year, Retiring at 61 with a retirement income goal of $112,500 - • Projected Portfolio Values at age 94 based on??? • 10 Yr Return of 15.2%? 20 Yr Return of 15.8%? • 40 Year 12.23%?$23 Million Estate….CRATS, CRUTS, and ILITs !! • Market Reality: • Actual Market at 12.23% (’60-’99): Actual Results: Broke @ Age 85 $1.5 Million Actual Market at 12.09% (’61-’00): $5.7 Million Actual Market at 9.79% (’35-’74): “BEST” Practice OR MALPRACTICE?

  23. Current “Best Practices”Identify risk tolerance, optimize asset allocation, & do a financial plan... • For Example, Harry Abernathy... • 54 Year Old, $900,000 Portfolio, Saving $16,000 a year, Retiring at 61 with a retirement income goal of $112,500 - • Projected Portfolio Values at age 94 based on??? • 10 Yr Return of 15.2%? 20 Yr Return of 15.8%? • 40 Year 12.23%?$23 Million Estate….CRATS, CRUTS, and ILITs !! • Market Reality: • Actual Market at 12.23% (’60-’99): Actual Results: Broke @ Age 85 $1.5 Million Actual Market at 12.09% (’61-’00): $5.7 Million Actual Market at 9.79% (’35-’74): “BEST” Practice OR MALPRACTICE?

  24. Current “Best Practices”Identify risk tolerance, optimize asset allocation, & do a financial plan... • For Example, Harry Abernathy... • 54 Year Old, $900,000 Portfolio, Saving $16,000 a year, Retiring at 61 with a retirement income goal of $112,500 - • Projected Portfolio Values at age 94 based on??? • 10 Yr Return of 15.2%? 20 Yr Return of 15.8%? • 40 Year 12.23%?$23 Million Estate….CRATS, CRUTS, and ILITs !! • Market Reality: • Actual Market at 12.23% (’60-’99): Actual Results: Broke @ Age 85 $1.5 Million Actual Market at 12.09% (’61-’00): $5.7 Million Actual Market at 9.79% (’35-’74): “BEST” Practice OR MALPRACTICE?

  25. Current “Best Practices”Identify risk tolerance, optimize asset allocation, & do a financial plan... • For Example, Harry Abernathy... • 54 Year Old, $900,000 Portfolio, Saving $16,000 a year, Retiring at 61 with a retirement income goal of $112,500 - • Projected Portfolio Values at age 94 based on??? • 10 Yr Return of 15.2%? 20 Yr Return of 15.8%? • 40 Year 12.23%?$23 Million Estate….CRATS, CRUTS, and ILITs !! • Market Reality: • Actual Market at 12.23% (’60-’99): Actual Results: Broke @ Age 85 $1.5 Million Actual Market at 12.09% (’61-’00): $5.7 Million Actual Market at 9.79% (’35-’74): “BEST” Practice OR MALPRACTICE?

  26. Current “Best Practices”Identify risk tolerance, optimize asset allocation, & do a financial plan... • For Example, Harry Abernathy... • 54 Year Old, $900,000 Portfolio, Saving $16,000 a year, Retiring at 61 with a retirement income goal of $112,500 - • Projected Portfolio Values at age 94 based on??? • 10 Yr Return of 15.2%? 20 Yr Return of 15.8%? • 40 Year 12.23%?$23 Million Estate….CRATS, CRUTS, and ILITs !! • Market Reality: • Actual Market at 12.23% (’60-’99): Actual Results: Broke @ Age 85 $1.5 Million Actual Market at 12.09% (’61-’00): $5.7 Million Actual Market at 9.79% (’35-’74): “BEST” Practice OR MALPRACTICE?

  27. Current “Best Practices”Identify risk tolerance, optimize asset allocation, & do a financial plan... • For Example, Harry Abernathy... • 54 Year Old, $900,000 Portfolio, Saving $16,000 a year, Retiring at 61 with a retirement income goal of $112,500 - • Projected Portfolio Values at age 94 based on??? • 10 Yr Return of 15.2%? 20 Yr Return of 15.8%? • 40 Year 12.23%?$23 Million Estate….CRATS, CRUTS, and ILITs !! • Market Reality: • Actual Market at 12.23% (’60-’99): Actual Results: Broke @ Age 85 $1.5 Million Actual Market at 12.09% (’61-’00): $5.7 Million Actual Market at 9.79% (’35-’74): “BEST” Practice OR MALPRACTICE?

  28. Current “Best Practices”Identify risk tolerance, optimize asset allocation, & do a financial plan... • For Example, Harry Abernathy... • 54 Year Old, $900,000 Portfolio, Saving $16,000 a year, Retiring at 61 with a retirement income goal of $112,500 - • Projected Portfolio Values at age 94 based on??? • 10 Yr Return of 15.2%? 20 Yr Return of 15.8%? • 40 Year 12.23%?$23 Million Estate….CRATS, CRUTS, and ILITs !! • Market Reality: • Actual Market at 12.23% (’60-’99): Actual Results: Broke @ Age 85 $1.5 Million Actual Market at 12.09% (’61-’00): $5.7 Million Actual Market at 9.79% (’35-’74): “BEST” Practice OR MALPRACTICE?

  29. Current “Best Practices”Identify risk tolerance, optimize asset allocation, & do a financial plan... • For Example, Harry Abernathy... • 54 Year Old, $900,000 Portfolio, Saving $16,000 a year, Retiring at 61 with a retirement income goal of $112,500 - • Projected Portfolio Values at age 94 based on??? • 10 Yr Return of 15.2%? 20 Yr Return of 15.8%? • 40 Year 12.23%?$23 Million Estate….CRATS, CRUTS, and ILITs !! • Market Reality: • Actual Market at 12.23% (’60-’99): Actual Results: Broke @ Age 85 $1.5 Million + 9 yrs Actual Market at 12.09% (’61-’00): $5.7 Million Actual Market at 9.79% (’35-’74): “BEST” Practice OR MALPRACTICE?

  30. Current “Best Practices”Identify risk tolerance, optimize asset allocation, & do a financial plan... • For Example, Harry Abernathy... • 54 Year Old, $900,000 Portfolio, Saving $16,000 a year, Retiring at 61 with a retirement income goal of $112,500 - • Projected Portfolio Values at age 94 based on??? • 10 Yr Return of 15.2%? 20 Yr Return of 15.8%? • 40 Year 12.23%?$23 Million Estate….CRATS, CRUTS, and ILITs !! • Market Reality: • Actual Market at 12.23% (’60-’99): Actual Results: Broke @ Age 85 $1.5 Million Actual Market at 12.09% (’61-’00): $5.7 Million Actual Market at 9.79% (’35-’74): “BEST” Practice OR MALPRACTICE?

  31. Current “Best Practices”Identify risk tolerance, optimize asset allocation, & do a financial plan... • For Example, Harry Abernathy... • 54 Year Old, $900,000 Portfolio, Saving $16,000 a year, Retiring at 61 with a retirement income goal of $112,500 - • Projected Portfolio Values at age 94 based on??? • 10 Yr Return of 15.2%? 20 Yr Return of 15.8%? • 40 Year 12.23%?$23 Million Estate….CRATS, CRUTS, and ILITs !! • Market Reality: • Actual Market at 12.23% (’60-’99): Actual Results: Broke @ Age 85 $1.5 Million Actual Market at 12.09% (’61-’00): $5.7 Million Actual Market at 9.79% (’35-’74): “BEST” Practice OR MALPRACTICE?

  32. Current “Best Practices”Identify risk tolerance, optimize asset allocation, & do a financial plan... • For Example, Harry Abernathy... • 54 Year Old, $900,000 Portfolio, Saving $16,000 a year, Retiring at 61 with a retirement income goal of $112,500 - • Projected Portfolio Values at age 94 based on??? • 10 Yr Return of 15.2%? 20 Yr Return of 15.8%? • 40 Year 12.23%?$23 Million Estate….CRATS, CRUTS, and ILITs !! • Market Reality: • Actual Market at 12.23% (’60-’99): Actual Results: Broke @ Age 85 $1.5 Million Actual Market at 12.09% (’61-’00): $5.7 Million Actual Market at 9.79% (’35-’74): “BEST” Practice OR MALPRACTICE?

  33. Of Course, This Is Due To Assuming ZERO RISK... Even Though We Identified This Risk Standard Deviation Which Looks Like This As Downside Risk: Of Course…Monte Carlo Simulation Solves This Problem…

  34. Of Course, This Is Due To Assuming ZERO RISK... Even Though We Identified This Risk We Will Assume ZERO Standard Deviation in His Plan Standard Deviation Which Looks Like This As Downside Risk: Of Course…Monte Carlo Simulation Solves This Problem…

  35. Of Course, This Is Due To Assuming ZERO RISK... Even Though We Identified This Risk We Will Assume ZERO Standard Deviation in His Plan Standard Deviation Which Looks Like This As Downside Risk: Of Course…Monte Carlo Simulation Solves This Problem…

  36. Because with Monte Carlo we include risk and show the importantinformation that he will end up: Somewhere between:$242 millionBROKE @ Age 67

  37. Because with Monte Carlo we include risk and show the importantinformation that he will end up: Somewhere between:$242 millionBROKE @ Age 67

  38. But we can get Harry to the HIGHEST Probability of “Success”(So he won’t have to worry about eating cat food in retirement) By getting them used to the taste NOW! (Requires $250k A YEAR in SAVINGS)

  39. But we can get Harry to the HIGHEST Probability of “Success”(So he won’t have to worry about eating cat food in retirement) By getting him used to the taste NOW! (Requires $250k A YEAR in SAVINGS)

  40. And Leave Him With A 75-90% Chance By getting him used to the taste NOW! (Requires $250k A YEAR in SAVINGS)

  41. And Leave Him With A 75-90% Chance Of Dying On A Death Bed Stuffed With Money He Wished He Had Spent! By getting them used to the taste NOW! (Requires $250k A YEAR in SAVINGS)

  42. Do You Perceive a Contradiction to:Reliable? • Retirement Age? • “Financial Independence”? • Sacrifice Goals You Want, for those you DO NOT VALUEFinancial Independence?3-6X Estate Goal? • 1- Obtain Complete Financial Profile • 2- Determine Financial Goals • 3- Identify Risk Tolerance • 4- Optimize Asset Allocation(highest return for risk tolerance) • 5- Establish Performance Benchmarks • 6- Project Future Resources Based on Conservative Assumptions • 7- Determine Savings Shortfall-“Gap” • 8- Search for Best Funds/Managers Based on Policy • 9- Monitor Performance and Update Plan “Regularly”

  43. Do You Perceive a Contradiction to:Reliable? • Retirement Age? • “Financial Independence”? • Sacrifice Goals You Want, for those you DO NOT VALUEFinancial Independence?3-6X Estate Goal? • Either: • Ignore Risk…UNRELIABLE • Include Risk…Nearly Certain Sacrifice to One’s Only Life • 1- Obtain Complete Financial Profile • 2- Determine Financial Goals • 3- Identify Risk Tolerance • 4- Optimize Asset Allocation(highest return for risk tolerance) • 5- Establish Performance Benchmarks • 6- Project Future Resources Based on Conservative Assumptions • 7- Determine Savings Shortfall-“Gap” • 8- Search for Best Funds/Managers Based on Policy • 9- Monitor Performance and Update Plan “Regularly”

  44. CONTRADICTION? Do You Perceive a Contradiction to:Reliable? • CONTRADICTION? • Retirement Age? • “Financial Independence”? • Sacrifice Goals You Want, for those you DO NOT VALUEFinancial Independence?3-6X Estate Goal? • Either: • Ignore Risk…UNRELIABLE • Include Risk…Nearly Certain Sacrifice to One’s Only Life • 1- Obtain Complete Financial Profile • 2- Determine Financial Goals • 3- Identify Risk Tolerance • 4- Optimize Asset Allocation(highest return for risk tolerance) • 5- Establish Performance Benchmarks • 6- Project Future Resources Based on Conservative Assumptions • 7- Determine Savings Shortfall-“Gap” • 8- Search for Best Funds/Managers Based on Policy • 9- Monitor Performance and Update Plan “Regularly”

  45. CONTRADICTION!!! Do You Perceive a Contradiction to our Best Practices? • What We “Say” What it REALLY MEANS! • 1- Obtain Complete Financial Profile • 2- Determine Financial Goals • 3- Identify Risk Tolerance • 4- Optimize Asset Allocation(highest return for risk tolerance) • 5- Establish Performance Benchmarks • 6- Project Future Resources Based on Conservative Assumptions • 7- Determine Savings Shortfall-“Gap” • 8- Search for Best Funds/Managers Based on Policy • 9- Monitor Performance and Update Plan “Regularly” • Inconvenience All Clients • Data Points, Not Priorities • How Much Pain Can You Bear? • Position You To Experience It! • Measure Markets Not Goals • Ignore Risk – Unreliable • Include Risk – Certain Sacrifice • Save More, NOT Less! • In Greek and Ignore Uncertaintyof Underperforming • Show What Happened, NOT what it means to you… • Repeat Initial Inconvenience…“Regularly”

  46. CONTRADICTION!!! Do You Perceive a Contradiction to our Best Practices? • What We “Say” What it REALLY MEANS! • 1- Obtain Complete Financial Profile • 2- Determine Financial Goals • 3- Identify Risk Tolerance • 4- Optimize Asset Allocation(highest return for risk tolerance) • 5- Establish Performance Benchmarks • 6- Project Future Resources Based on Conservative Assumptions • 7- Determine Savings Shortfall-“Gap” • 8- Search for Best Funds/Managers Based on Policy • 9- Monitor Performance and Update Plan “Regularly” • Inconvenience All Clients • Data Points, Not Priorities • How Much Pain Can You Bear? • Position You To Experience It! • Measure Markets Not Goals • Ignore Risk – Unreliable • Include Risk – Certain Sacrifice • Save More, NOT Less! • In Greek and Ignore Uncertaintyof Underperforming • Show What Happened, NOT what it means to you… • Repeat Initial Inconvenience…“Regularly”

  47. CONTRADICTION!!! Do You Perceive a Contradiction to our Best Practices? WOULD YOU BUY THIS???! • What We “Say” What it REALLY MEANS! • 1- Obtain Complete Financial Profile • 2- Determine Financial Goals • 3- Identify Risk Tolerance • 4- Optimize Asset Allocation(highest return for risk tolerance) • 5- Establish Performance Benchmarks • 6- Project Future Resources Based on Conservative Assumptions • 7- Determine Savings Shortfall-“Gap” • 8- Search for Best Funds/Managers Based on Policy • 9- Monitor Performance and Update Plan “Regularly” • Inconvenience All Clients • Data Points, Not Priorities • How Much Pain Can You Bear? • Position You To Experience It! • Measure Markets Not Goals • Ignore Risk – Unreliable • Include Risk – Certain Sacrifice • Save More, NOT Less! • In Greek and Ignore Uncertaintyof Underperforming • Show What Happened, NOT what it means to you… • Repeat Initial Inconvenience…“Regularly”

  48. We Need To Start From Scratch! • NEW PREMISES OF WHAT FINANCIAL ADVICE IS: • How about this for a value proposition? • I help clients make the most of the one life they have… • How do you do that? • By CONFIDENTLY achieving the goals each client uniquely values • Without needlessly sacrificing their lifestyle • And avoiding unnecessary investment risks

  49. We Need To Start From Scratch! • NEW PREMISES OF WHAT FINANCIAL ADVICE IS: • How about this for a value proposition? • I help clients make the most of the one life they have… • How do you do that? • By CONFIDENTLY achieving the goals each client uniquely values • Without needlessly sacrificing their lifestyle • And avoiding unnecessary investment risks

  50. Resolution to Contradictions of FORMER Best Practices… • RESOLUTIONS based on NEW PREMISES OLD Contradictions: • 1- Obtain Only What is Needed/Material • 2- Identify Ideal Dreams and Acceptable Compromises…AND PRIORITIES • 3- Avoid Unnecessary Risk • 4- “Benchmark the beach house”Measure progress toward goals • 5- Provide Comfort…rational confidence…Avoid too much: Uncertainty OR Sacrifice • 6- Solutions based on acceptable compromises to achieve priorities • 7- Speak clients’ language and avoid implementation uncertainty • 8- Progress toward goals, and changing goals or priorities…on demand & proactive • Inconvenience All Clients • Data Points, Not Priorities • How Much Pain Can You Bear? • Position You To Experience It! • Measure Markets Not Goals • Ignore Risk – Unreliable • Include Risk – Certain Sacrifice • Save More, Never Less! • In Greek and Ignore Uncertaintyof Underperforming • Show What Happened, NOT what it means to you… • Repeat Initial Inconvenience…“Regularly” RESOLUTIONS!!!

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