When you write down your goals, you're more likely to achieve them. That's exactly what brokers Peter Jurasz, Doug Scudder and Brian Lingle do for clients.
This Juneau, Alaska-based trio at Salomon Smith Barney got the idea to map clients' goals at a team-training program in Los Angeles last year.
“I'm a visual person and many clients are, so we worked up a flow chart,” Scudder says. Emma Held, a registered associate on the team, helped create the document.
When a client comes in, the brokers explain the goal map see sample). “ We walk them through the boxes,” Scudder says. “ We tell them, ‘ If you do all these things, you'll have the greatest chance to accomplish your goals.’”
“Where are you now?” is the first question on the map. The intent is to list assets that can be used for financial goals, Scudder says. It encourages full disclosure of financial resources, including accounts at other brokerage firms, business interests and possible inheritances.
The next question, “What are your dreams, goals and aspirations?” is sometimes difficult for clients to answer. But it's important for them to start pondering it. “ that's why ongoing meetings are important,” Scudder says. “They're thinking, and it's becoming clearer.”
In answer to the cost question, clients generally produce a monthly number. “Most people can quantify that,” Scudder says. “We factor in inflation and calculate principal to draw income.”
To make sure the cost estimate is a good one, Scudder asks a lot of questions: “Will you stay in Juneau? Will you keep your house? Buy another? Travel? Buy an RV?”
Other map questions uncover clients' income sources and plans to save.
Navigating With the Map
Once all the information has been collected, the brokers calculate the required rate of return and determine whether the level of uncertainty is acceptable to the client. They use the word uncertainty rather than risk because it's a better description, Scudder says.
The goal-mapping process is valuable because it reveals unrealistic expectations. A client might want to retire in 10 years, but needs a 15% rate of return to do so. It could happen, however, the team will discuss the high level of uncertainty involved.
“It's a long shot,” Scudder says. He will tell the client, “I would prefer to get a plan in place with better certainty that you'll accomplish your goals.” That means going back to adjust the client's expectations about working and saving.
Next, Lingle takes the ball to design a portfolio. “He'll work it up using Ibbotson data and our internal database,” Scudder says. “He'll determine the best asset allocation to meet their goals.”
In a follow-up meeting, the brokers explain the results. “Here's what you need and the best allocation with the least risk,” Scudder says to clients. The plan includes specific consolidation recommendations. “It'll say, ‘Move your Merrill Lynch account here and buy this manager in small-cap value.’” However, if an asset has large capital gains, they'll exclude it from the allocation.
Putting plans on paper makes a difference. “It's the first time anyone has taken where they are now and shown them the exact rate of return needed to get them where they're going,” Scudder says.
The team has been using the goal map for almost a year. Client response has been “amazing, extremely positive,” Scudder says. “There has been a high level of consolidation. To bring in assets in this market is very rewarding.” Rewarding is right. The team manages $250 million.
Doug Scudder and Peter Jurasz teamed up about six years ago. “Peter and I are largely asset gatherers,” Scudder says. Jurasz specializes in estate planning, and Scudder is a money manager.
They each brought an assistant to the partnership. Emma Held originally worked with Scudder and handles client service and technology. C.J. Lakey, senior registered associate, worked with Jurasz. She concentrates on operations issues, including compliance and paperwork.
A year and a half ago, Scudder and Jurasz brought in Brian Lingle as a rookie. He's responsible for converting C-level clients into A's and B's. “It worked out great,” Scudder says. “We accelerated the partnership. We put him in at one-third.”
The team shares a sense of humor and has fun together. “We're so blessed that our personalities have all meshed so well,” Scudder says. “It's part of our philosophy. Money is a serious issue. We deal with it professionally, [but we don't forget] to smile and ask how clients are doing.”
Registered Representative welcomes your comments on this story. Contact Editor in Chief Dan Jamieson at [email protected] or call 800/621-0720.