IN COUNTRY

The “Brain Trust”

By Michelle Galler

July 2009

The 19th-century stone cottage in the charming Virginia horse-country village of Middleburg is the last place that you would expect to find a nexus of sophisticated financial planning services. The three-woman team that is the “brain trust” of Focus Wealth Management planned it that way — they want to be different from the herd of the myriad financial services companies in the region.

Though the firm offers comprehensive financial management services, their specialty is providing financial planning services for clients who are in the midst of financial transitions. This means helping their clients grapple with the financial and concurrent emotional issues that come with life changes — retirement, loss of a spouse, a divorce or sudden wealth. Half of their clientele are couples and men and the rest are financially independent women.

“Serving a smaller number of long-term relationships allows a deep understanding and genuine affection to develop between us and or clients,” said Sandi Atkins, the firm’s president and a CPA. “Since we are women, we don’t intimidate other women who sometimes feel like male financial experts patronize them. They can tell us things that they can’t share with their best friends, since they don’t usually discuss money issues with their friends.”

The very real problems of this last year in the financial sector have caused many individuals, including some of their clients, to make fear-based decisions.

“As much as we try to inoculate our clients from the fear/greed cycle that can undo even the most seasoned investors, the negative perceptions in the financial news media,” says company Vice President Helen Modly, “have made it a constant challenge of late.”

“Negativity and fear have a psychological affect on our actions — initiating the fight-or-flight response. And since you can’t fight a market downturn, too many people run,” said Modly. “In the cases where clients may have decided to sit it out of equities for a while, it is our job to develop plans with them for the immediate reality and longer-term plans that make sense for them and their portfolios.”

“We see trends — some positive and some not. A negative trend is that many people perceive the world to be more threatening and dark than it has ever been. But, consider that more people are surviving disease and accidents than ever before, more people are eating three meals a day now than before and fewer soldiers are dying in wars,” says Modly.

“A positive aspect to what has occurred of late is that investors are questioning the motives of the people who have been advising them. Our clients trust us to be completely transparent about how much they are paying for our advice and services. Rather than ‘money honeys,’ we are more like ‘money mothers’ to our clients.”

A large part of their clientele is facing retirement and seeking to create economic plans that will give them peace of mind.

“More people in their 50s see retirement as a sabbatical from their pre-retirement jobs,” says Modly. “These are successful people who are built to work and appreciate their achievements and many are reassessing their skills and setting off into fantastic new directions. They expect us to help them create the financial model that will support the second or third chapters in their lives.”

Asked what financial planning products are appropriate in this new economic reality, Atkins said, “The financial products that were sound prior to October 2008 are still appropriate. The products didn’t fail. Stocks did what stocks do — go up and down.

“The issue is, are we using the right mix of products for the right situation? Many investors were seduced by the low volatility that we had been experiencing prior to last year,” she said. “They internalized the absence of recent pain and believed that they had a high tolerance for risk. That gauge has been reset for many. Today, some products or services may appear to be more attractive than before, but they are the same products. The investors are the ones who have changed.”

The question that investors should be asking today is the same one that they should have been asking themselves all along: “Where do I want to go from here and who can best help me get there?”

“We believe that we can,” said Modly.

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