How to Illustrate Planning Risks to Clients
Clients face three big risks in retirement from the sequence of returns, volatility and asset shortfalls. Michael Hirthler, the founder and chief investment officer at Pennsylvania-based Jacobi Capital Management, explained to me how he uses the Big Picture app to explain those risks to his clients.
The software is priced accessibly at just $30 a month. Advisors can start a free 30-day trial by clicking here.
The app explains to his clients how different scenarios will affect those risks. He said that in many other software programs, there is an illusion that an advisor can control those risks. But the Big Picture shows clients how market performance can undermine the best-designed financial plans – and how advisors can minimize those risk.
Jacobi manages $1.4 billion in assets and most of its clients are mass affluent and high-net worth individuals.
The Big Picture has been endorsed by Bill Bengen, Bob Veres, Joel Bruckenstein and countless financial advisors.
The ability to print out PDFs of portfolios during different market environments, customized for each client, is a big advantage, says Hirthler. He uses these frequently with clients and finds that it doesn’t make things overwhelmingly complicated for the client.
The app explores many “what if?” scenarios, including downturns. As Howard Marks and many great investors say, “every cycle ends.” Hirthler helps clients avoid scenarios like being retired at 66, but having to go back to work at 76 because of a downturn and poor planning. Hirthler believes in teaching clients about sentiment and cycles, in addition to showing what could happen in different scenarios.