Investors faced ups, downs, and turns in directions nobody would expect in 2022. Amid talk of bear markets, seemingly never-slowing inflation, and the state of fixed-income and alternative assets, financial advisors agree on one constant: have a financial plan that’s tailored to you.
We are big champions of financial advisors at Investopedia. Each year, we celebrate the nation’s most influential ones through the Investopedia 100—our unique list of the independent advisors who spread financial literacy, education, and insights to their clients, communities, and the industry. In October, at the annual Schwab IMPACT Conference, we spoke with a few leading advisors and investing professionals about what’s on their clients’ minds, and how exactly they’re helping them prepare for 2023.
Will the cost of goods finally decline? Is there one strategy for clients that works better than others? Read on to find out what investing professionals think 2023 will bring—and how they plan to guide their clients through it.
Peter Lazaroff, CIO of Plancorp
“I believe that a one-size-fits-all portfolio is dead, and I think we are now at an age of customization. Whether you are 60% stocks or not, the amount of customization that we can do, as advisors, due to technology, due to product offerings, and due to some better processes and experiences learned—I would say that you usually can point a client to the levels of customization.
Going into 2023, a lot of what I want clients to understand is that the current starting point where we are in the market—it’s not so much risky as it is annoying. And you have to attach a human side to this—nobody likes bear markets—we know it’s a part of it. We’ve coached our clients to expect them. But the big part of the drop, the big part of the risk has already happened. And that’s not to say we couldn’t fall further. But, as long as you think that three years from now, stocks will be higher, or even one year, two years from now they’ll be higher—a lot of the risk is erased. The biggest risk is that you behave poorly.
And so I think that’s the theme heading into 2023, as silly as it sounds, that we want to carry forward to clients. Bear markets are bummers. We knew they were going to happen, and we don’t like them. We are going to be here to make sure that you don’t make a mistake, because the choices you make in a bear market can define your ultimate investment success. And so, we want to make sure that everybody behaves, keeps their hands on the wheel, and their eyes on the prize.”
Helen Stephens, Founder of Aspen Wealth Management
“We’re continuing to focus on what we can control, not on what we can’t control. Financial plan reviews have been more impactful for our clients than portfolio reviews. They just want to make sure that they have the peace of mind knowing that everything is going to be okay.Clients overall know the short-term noise in markets will subside, and overall, they’re more interested in how their portfolio affects the future in context with the changes in their lifestyle expenses, their savings, and how long they plan to keep working.
So we’re really focused right now on the financial plan and not so much the portfolio review, because everybody has a plan, and that plan is determined by how they’re allocated in their portfolio.”
Brian Vendig, President & Managing Executive of MJP Wealth Advisors
“One thing that we’ve been preparing for, and thinking about the market moving forward, is just staying aware of risk, and relating that back to our clients’ needs.
We’re also thinking about any upcoming tax law changes, anything that might come out of the midterm elections, from a planning point of view. And also knowing that there are certain laws that are on the books right now which are going to sunset in 2025, 2026, whether that’s opportunity zone funds, or whether that’s estate planning topics. And I think at the end of the day, it’s just trying to be proactive, to keep people informed of, you know, what’s coming down the road, measuring it back to how they’re managing their household, what’s going on at work, are they meeting their living expense needs, and I think it’s just an ongoing process of assessments.”
Rob Santos, CEO or Arrowroot Family Office
“I don’t think anybody can put a cookie-cutter model across all aspects of clients in this market. It just doesn’t work. We had a number of clients that had tens of millions of dollars worth of crypto, and we talked to them about a number of periods about diversifying and protecting their wealth. And to varying degrees of success, we had some folks that will just still hold these assets forever, for their die-hard beliefs.
And then we’ve had others that did make some of those decisions, and we could do some creative things around hedging around those crypto positions, which were traditional finance tools that we’re implementing into a new crypto world—selling calls, buying puts , to be able to protect them for this winter. So we try to add value where we can, and where it’s feasible. But there has to be receptiveness on the other side from the client.”
Malcolm Ethridge, Financial Advisor with CIC Wealth
“One of the things we’ve been focused on for 2023 is dissecting the portfolio to find out how much concentration we have in mega-cap tech, and making sure that clients are aware of the top 10 holdings in their portfolio. So a lot of what we do is a blend between ETFs and mutual funds.For clients who are a little bit more conservative, maybe moderate-to-conservative, they need to be more diversified and more balanced than their equity exposure, just in case that tech trade goes away and doesn’t rebound with the rest of the market in the way it has for the last decade or so.”
These interviews have been edited and condensed for clarity. We featured these conversations on The Investopedia Express podcast, so be sure to tune into the show if you want to hear more.