Morningstar Advisor - Summer 2008 - (Page 15)

Advisor Profile Engineering Financial Advice By Will Lewis Brant Greene uses his training as an engineer to develop logical financial plans. Just as Brant Greene didn’t rely on chance when he was designing torpedoes in a prior career as a government engineer, he doesn’t roll the dice when it comes to clients’ money. “I try to ring out the luck factor by being smart and using engineering principles,” says Greene, CFP, a senior financial advisor with Ameriprise Financial. He can’t engineer all the risks out of investing, but he emphasizes to clients the need to set realistic goals, invest conservatively, spend within their means, and save—in other words, to do the things they have the power to control, and not sweat the stuff they can’t, such as short-term performance numbers. The key, Greene says, is for clients to keep their eyes on their long-term goals. “If you have a poor financial plan,” he says, “performance will not bail you out.” Clients Get the Plan On the equity side, Greene likes to cover every area of the Morningstar Style Box in the portfolio, and he keeps the most aggressive categories, such as emerging markets and international bond, at less than 5% of a client’s assets. Greene considers himself an index guy. To gain broad exposure to the market, he uses Vanguard index funds and is a big believer of ETFs for their low costs and tax efficiency. For the bond portion of a portfolio, Greene says that he likes to have a little bit of everything. He uses Vanguard Total Bond Market Fund BND and other bond ETFs available through iShares. He also has clients in Fidelity Advisor Strategic Real Return FSRAX and Oppenheimer International Bond OIBAX. Once the investment selections are in place, Greene uses Advisor Workstation to monitor and manage the portfolio. He generates more than 500 Portfolio Snapshot reports every year to help him determine where to dialdown or -up a client’s portfolio. Greene’s planning techniques have paid off. Rare is the phone call from a panicky client when the market isn’t doing well, he says. In the 2000-02 bear market, for example, his clients sat tight. This rocky period did make Greene realize that he needed to hold more face-to-face meetings with his clients and do a better job of explaining to them the downside risk of their portfolios. He now builds worst-case scenarios and meets with each client four times a year. Greene also doesn’t hear from clients clamoring to jump on a bandwagon. He says that his clients understood, for example, why he wasn’t piling them into real estate during its huge runup earlier this decade. He wasn’t comfortable with real estate’s valuations at the time, for which his clients are now appreciative. Time for a Change The foundation of a good financial plan, Greene says, is accuracy in measuring a client’s risk tolerance. For this, he uses the Risk Assessment in Morningstar Advisor Workstation Enterprise Edition, which he uses through Ameriprise. Based on the results, he then establishes a benchmark of how much of a client’s portfolio should be divided between equity and fixed income. In the early 1990s, Greene made two big moves in his life. He had spent a decade working as an electrical engineer with the government—in a “dead-end job,” as he now puts it—when he helped his parents find a financial advisor in 1993. He says that he always had an interest in finance, but it wasn’t until he saw firsthand the financial-planning process that he realized how he could apply his engineering knowledge to being an advisor. “In my logical brain as an engineer,” Greene says, “it made sense that you start with a process of working on someone’s goals, gathering data, and reviewing the process. It seemed smart and was a good segue into a new career.” MorningstarAdvisor.com 15 http://MorningstarAdvisor.com

Table of Contents Feed for the Digital Edition of Morningstar Advisor - Summer 2008

Morningstar Advisor - Summer 2008 Contents Letter from the Editor Contributors Inbox College Planning: Solutions and Concerns ETFs: The Next Chapter Engineering Financial Advice Investment Briefs Flexible vs. Style-Pure Managers: The Evidence Forging a New Commodity Index Work Your Way Through College Planning Sizing Up the Options Best and Worst 529 College-Savings Plans A 529 Travel Guide 10 Tax-Smart Tips for College-Savings Planning Global Dialogue How Sequoia Cranks Out Good Returns Year After Year The Many Layers of David Winters Living on the Edge Stocks to Buy Once a Decade With Munis Feeling the Pain, Some Opportunities Arise Health Care Provides Shelter from Economic Storm Help Your Clients Get More Out of Their Bond Portfolios Mutual Fund Analyst Picks 50 Most Popular Equity ETFs Undervalued Stocks Most Popular Variable Annuities New at Morningstar New on MorningstarAdvisor.com Closer to Fine

Morningstar Advisor - Summer 2008

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