BY JILL NAGY
Up to date technology, combined with a personal touch, keeps clients informed about their assets and the events and trends that affect them.
Both are critical in a modern asset management practice, according to those in the field.
“Technology is a beautiful thing as long as you embrace it,” said Steve Bouchey of Bouchey Financial Group in Saratoga Spring. His company recently made a seven-figure investment in software to keep clients informed and to enable the professional managers to do their work more efficiently.
Clients can log on any time to see where their money is and to access some 20 reports. Meanwhile, he can rebalance several hundred accounts in a matter of minutes and issue tax reports to clients and, if the client wishes, to their tax preparers, also in a matter of minutes. The system, he said, “is up to date and spectacular. It’s amazing what clients can see and do.”
Plenty of information and the ability to check on their investments 24/7 can go a long way toward restoring investor confidence after scandals that rocked the financial world in recent years, Bouchey said.
“When they can check regularly to make sure their money is there, it puts clients’ minds at ease,” he noted.
Bouchey’s system was produced locally by Shannon Rose in Saratoga Springs. It includes trading platforms, including Charles Schwab for trading stocks, and a website that he terms “secure and spectacular.”
Tim Pehl of Kumlander, Donofrio, Hay & Pehl in Malta, on the other hand, sees personal contact as critical.
“We have to differentiate ourselves” from the “robo-advisors,” he said. “Our clients are getting more sophisticated and demand more individualized advice and plans.”
He tries to meet face to face with each client twice a year, “but a lot just do not like to meet.” So he keeps in contact by telephone and email. Still, his firm is considering adding more automated service, “maybe down the road,” as a way to help reduce fees.
On a national basis, the financial industry is embracing automation in a major way. According to an article in the February 28, 2016, issue of the New York Times Magazine, ” Finance stood out in particular [among industries embracing technology]: Because of the degree to which the industry is built on processing information–the stuff of digitization . . . . Investments in what is know as fintech, or financial technology, tripled between 2013 and 2014 to $12.2 billion, and start-ups are taking aim at nearly every line of financial business.”
Pehl noted that financial planning software “is getting more sophisticated” and enables a planner to customize financial plans to meet the needs of clients in different situations.
Pehl doesn’t think clients are skittish because of scandals in the financial planning business.
“We headed that off at the pass,” he said. “We have to provide certain disclosures to new clients,” and they provide regular monthly and quarterly statements of their accounts. In addition, his clients never write a check to his firm. They only write checks to the custodians of their assets. The company’s business is strictly fee-based; they get no commissions and do not sell financial products.
What does make investors nervous, Fehl said, is what they hear and read in the news. Last January and February were “a rocky time for the market” and the past 15 years with the recession, the technology and housing bubbles, uncertainty in China, and a volatile oil market, among other factors, “has been a real rollercoaster ride.”
He tries to counter that by keeping clients informed of what is happening and the probable outcomes and trying to keep them focused on the long term. He points out that there is a recession every six or seven years and, on the whole, his clients’ portfolios are far stronger than they were 20 years ago.
Bouchey said “most investors are better served not to look at their holdings everyday,” although they can. He also noted that “the start of 2016 has been volatile. It feels different.”
But, taking a longer view, “most clients forget how much asset values have increased since 1986,” said Bouchey.
He also sees volatility as an opportunity. “Investors can use volatility to their advantage.”
Both advisers manage their clients’ money, making investment decisions on their behalf. They are staffed by registered financial planners and certified public accountants.
Bouchey terms his company “a boutique wealth management firm.” They handle 100 percent managed accounts and “We take that responsibility very seriously.”
The company has three financial planners and plans to soon add a fourth, as well as two CPA’s. They have been in business for 26 years, serving mainly individual clients but also some institutional clients and not for profit organizations.
Pehl’s firm has two CFA’s and is affiliated with a 13-member accounting firm. They have been registered investment advisors since 1992. He joined in 1998. They moved their main office to Malta from Saratoga Springs in 2000 and have a satellite office in Clifton Park.
Their clientele also consists mainly of individual accounts, but they also manage retirement plans for smaller companies.