- Investment Opportunities are Identified as Advisors and Their High-Net-Worth Clients Make Targeted Portfolio Adjustments, Assess How to Leverage Liabilities -
NEW YORK, Jan. 28 /PRNewswire-FirstCall/ -- The wealthy are looking for an optimal portfolio mix during these trying economic times, according to the Dow Jones Wealth Management Advisory Council. The Council is a group of top wealth managers dedicated to promoting the practice of wealth management, facilitating industry discussion and representing the needs and concerns of the profession.
Council members agree that in 2009, focusing on opportunities in liabilities instead of in assets and making tactical allocations for the long term are the winning strategies. Aided by their advisors, many high-net-worth clients are making minor adjustments to their lifestyles, while all are keeping their portfolios diversified.
"This market correction has been a big problem, but it's not a huge lifestyle change for our clients," said James A. Covell, senior vice president and financial consultant at RBC Wealth Management. "Our clients are disciplined and diversified, with a lot of money on the side. At this point, we're helping them to carefully make small adjustments to their portfolios to stay ahead of the game. The lesson learned here is that leverage is dangerous."
"We are helping our clients to focus on the long-term value through new opportunities," said Joseph W. Montgomery, managing director of investments for Wachovia Securities. "For example, we now have a lending coordinator at Wachovia to help clients take full advantage of the liabilities portion of their portfolios."
"Our clients are making sure that their long-term risk tolerance is in line with their asset allocation," said Patricia Bell, senior vice president of investments for Merrill Lynch. "Where there is a disconnect there needs to be discussions."
While there is a lot of information in the financial markets today, there is little real knowledge, the Council finds. Consequently, Council members are advising their clients to forgo risky investments and to focus on simple financial instruments going forward.
"I'm hearing a lot of anxiety about market conditions and participants," said Mike Sawyer, managing director of investments at Citi Smith Barney. "Clients need good information and sound financial reporting. There is a desire to go back to simple financial structures. Now is a great time to explore opportunities in fixed income, high-dividend blue chip stocks, well-managed funds and appropriate deposit vehicles. I am advising my clients to stay calm and to evaluate the best investment options based on comprehensive risk reviews."
Further, deleveraging across all sectors has been identified as one of the chief processes that will need to take place in the coming year.
"Many investors violated the fundamentals of sound investing in terms of too much leverage and not enough diversification," said George Schietinger, director, Credit Suisse Private Banking USA. "While long-term strategic planning is always important, given today's rapidly changing environment, a greater emphasis on tactical allocation is called for."
WealthTrends is a regular survey of the Dow Jones Wealth Management Advisory Council designed to provide insight into key issues affecting the wealth management industry and high-net-worth clients. Previous WealthTrends surveys have examined wealth preservation, handling turmoil in the markets, what makes a good wealth manager, taboo topics advisors must discuss with clients and hurdles for high-net-worth clients.
For more information about the Dow Jones Wealth Management Advisory Council and past panels, visit www.djwmac.com. For more information about the Dow Jones Enterprise Media Group, visit www.solutions.dowjones.com. To request additional information, please contact us at www.solutions.dowjones.com/solutions.
ABOUT DOW JONES WEALTH MANAGEMENT ADVISORY COUNCIL
The Dow Jones Wealth Management Advisory Council is an industry group dedicated to promoting the practice of wealth management, facilitating industry discussion, driving innovation and representing the needs and concerns of the profession. The Council draws its members from the most successful practitioners in wealth management, as well as experts from leading research and consulting organizations, including academia. The Council is hosted by Dow Jones Newswires. Information about the Council is available at www.djwmac.com.
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