by matthew d edward
D
espite the financial blogs’ assurances and the TV personalities’ loud declarations, few people, if any, can beat the market. And when clients walk into National Financial Services Group’s (NFSG) office looking to outperform the S&P 500 years over year, it is their job to pour cold water on those fantasies. “What the client understands [about returns] is ‘Can you beat the market?’ and we’ll have to tell them, ‘That’s not what we do,’” said Jim Cook ChFC®, CFS, the chief executive officer of NFSG. “If you want to work with us, we’re not going to beat the S&P 500. What we want to do is provide a reasonable rate of return with a less than reasonable rate of risk.” NFSG is a Georgia-based firm that provides comprehensive wealth management and retirement planning services to high net worth individuals, business owners, and to America’s underserved middle market. The firm does not maintain a minimum to invest. Cook’s belief in growing with the market emerged from his experiences in the 1990s. Then, Cook said, prospective investors would ask--with a straight face--for a 12 percent rate of return. Investors in that decade were “being promised things that couldn’t happen,” Cook told The Suit during a recent interview. Cook added that NSFG “lost clients” in the 1990s because of those promises being made by other firms, syphoning away investors to advisors elsewhere who likely never delivered. And when the 2008 financial crisis roiled markets, NFSG’s bet on stability paid off, with their clients coming through with less significant losses than those at other firms. “We protected clients’ money as best as possible,” he said. Investors believing the market is a game they can win remain incredibly common. A lack of financial literacy among savers may be partly to blame for this, with few prospective investors understanding even the basics of how the market works. Advisors often need to address this through client education, Cook said, adding that he participates in the GAMA International, an industry group that promotes improving financial literacy training in schools. “We believe that [financial] education p.48
ADVISORS MAGAZINE - SEPT 2017
SLOW AND WINS THE RACE needs to start at the elementary level,” Cook said. “It needs to start in elementary school with the basic fundamentals of saving money.” In addition to teaching students the value of money, schools also need to demonstrate that financial services is a viable career path, Cook said. The average age of a financial advisor is 50.9 years old, and 43 percent of advisors are over 55, according to a report by Cerulli Associates. Further, 8,600 advisors plan to leave the profession each year for the next decade, meaning a full third of the industry will retire within 10 years. With 10,000 baby boomers retiring per day--and 10,000 millennials turning 21 each day--there are plenty of retirees and
MANAGING MONEY MATTERSSM Our team approach helps ensure that we offer creative customized solutions for even the most complex financial issues.
