Morningstar Advisor - Summer 2008 - (Page 16)

Advisor Profile Brant Greene, Senior Financial Advisor, Ameriprise Financial Services seek out new information and unconventional points of view and tackle tough issues. His latest focus is on retirement income. “Financial planners are experienced in the accumulation phase,” he says, “but those techniques don’t work for the distribution phase.” To learn what does work, Greene sought out Jim Otar, another engineer-turned-advisor. Otar, of Otar & Associates in Thornhill, Ontario, travels the country speaking to advisors about retirement income. Greene likes him because he has solutions that work in practice. “Otar has a game plan,” Greene says. “He’s not just an academic. He’s an advisor.” One principle Greene adopted from Otar is what Otar calls the four-year test. Otar’s research has found that if a portfolio four years into retirement is worth more than it was on the first day of retirement, the portfolio is likely to sustain the retiree’s entire distribution period. If it’s worth less, the risk of the portfolio falling short increases substantially, and portfolio and lifestyle adjustments will have to be made. This test is an engineer’s solution to ringing out the luck factor. If a client happens to retire into a bull market and sees four years of good returns, then lucky for him, but that is something no advisor can plan for. Instead, Greene plans for the client who may retire into a struggling market. He strives to offset any bad luck by choosing low-cost, conservative investments run by good money managers who can create some alpha. Control for the things you can, and plan for the worst. These are sound engineering principles that Greene uses to become a better financial planner. K Will Lewis is a senior project manager in Morningstar’s Advisor business unit. How he caught our eye: Went from designing torpedoes to designing financial plans. Career path: Graduated from University of Massachusetts—Dartmouth in 1983 with a bachelor of science in engineering. He hired an advisor for his parents and was impressed with the logical process, so he started his own practice in 1995. Personal: 46, married. Some favorite bond funds: Vanguard Total Bond Market Fund BND, Fidelity Advisor Real Return FSRAX, Oppenheimer International Bond OIBAX. In 1995, Greene started a practice in Newport, R.I. A year later, he made another big switch. He relocated his business from one coast to the other, moving to Poulsbo, Wash., a scenic 20-minute ferry ride from Seattle, where his girlfriend (now wife) was living. Today, he has built what he calls a mom-and-pop business with two people on staff. He has pared his client base down to about 250 clients, mostly middle-income federal and hospital employees, and he has $35 million in assets under management. Greene says that he’s working close to his capacity but that he is taking on selective new clients, mostly referrals from his “best” clients. “They must be goal-oriented, advisor-receptive, and willing to pay for advice,” Greene says. Eventually, he’d like to pare the number of clients to below 200. From One Engineer to Another Greene believes that questioning the basic principles of financial planning makes him a better advisor. For that, he calls upon his engineering experience. Just as engineers have to plan for worst-case scenarios when building bridges and buildings, financial planners should also plan for the worst. Instead, Greene says, advisors too often smooth out numbers, focusing on the good and ignoring the bad. “Financial planners too often look at averages, and they can be too optimistic, which creates false dreams,” he says. “Engineers, on the other hand, try to disprove everything. The engineering community is very distrustful, so you can’t torture numbers into submission.” Greene is the first to admit that he’s skeptical. But his questioning nature leads him to 16 Morningstar Advisor Summer 2008

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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