With 36 years in the industry, Marty Higgins saw an impressive $13 million in production in 2011. His success is due largely to the fact that he has a carefully defined target market. On working with seniors, Higgins says, “It’s funny because when I was younger I didn’t have the patience to work with someone 40 years older than me. It was also perhaps that I didn’t have the experience or confidence and was masking it with a lack of patience. Now, however, since I am closer in age to that demographic at 57, I feel more of an affinity to serve and help them navigate the most important financial decisions of their lives.”
Higgins’ investment philosophy is simple: “It’s not about beating the S&P. The money is there to meet your goals.” Here he shares five tips for managing that money — and the needs of your clients — well.
See also: Marty Higgins on Maximizing Productivity
1. Look at the big picture.
When Higgins meets with a new client, his first step is to ascertain the client’s goals in retirement. Next, he literally maps out everything from their interests (cooking and travel, say) to their family relationships to their assets and their short and long-term goals. He prints all of this information out and assembles it on a laminated board.
But instead of actively managing the client’s money by picking stocks and bonds, he leaves that to a money manager. By doing so, he can focus on cultivating client relationships and making sure the client’s overall objectives are being met.
He uses a baseball analogy to describe his management process: Suppose the client is the owner and he’s the general manager of the client’s retirement savings. As GM, it’s up to Higgins to hire the right money manager to handle an individual client’s investments, much like a baseball manager manages the players on the field.
2. Don’t try to do everything.
Higgins firmly believes that specialization is the key to success. “I believe that you can manage people, or you can manage money,” he says. “Pick one. People say they’re going to manage the client relationship and then they sit in front of a quote channel picking stocks and bonds and rebalancing everything. It’s two separate jobs.”
3. Stay abreast of life changes.
A good leader knows what’s happening on the field. Higgins believes it’s vital to meet with clients regularly to find out about any life changes and to also ensure that clients are meeting with other important advisors, such as their attorney and CPA.
“Say you have a couple of retirees and two years later, their daughter calls up and says her husband left her and she has no place to stay. She’s coming in with the three kids. Well, that changes the retirement plan,” Higgins says.
4. Define the risks.
Other challenges can alter a client’s retirement plan as well. Two of the biggest are sequence of return risk and how to oversee the distribution phase of a person’s financial life, Higgins says.
“The most dangerous risk of all, the one that no one seems to be addressing with people, is sequence of return risk, or retiring into the teeth of a bear market,” he continues. “Average returns in the distribution phase are irrelevant. If the losses come early, you’re probably not going to recover with the standard buy-and-hold philosophy that Wall Street teaches. We have a whole slew of people wandering around in the dark thinking risk is the loss of principal, and what I have to convey to them is that there are tools now that we can use to manage the loss of principal. There are other risks involved like inflation and living too long, not just principal risk.”
Higgins contends that most financial planners excel during the accumulation stage of their clients’ portfolios. Yet when it comes time to parcel out that income during retirement, many advisors may lack those skills.
5. Stay visible in your community.
Higgins tries to meet his prospects where they’re at by offering solid advice in a non-sales focused setting. A favorite way to establish thought leadership in his community is by speaking at “lunch and learn” events with community groups. “They’re always looking for somebody to come in and talk about an interesting topic,” he says.
For sales & marketing tips from other top advisors, see SMA’s 2012 Advisor of the Year Finalists.