Independent Financial Advisor

Our commitment to being a great independent financial advisor begins with a commitment to protecting your investments from irrecoverable losses, while still pursuing appreciation.

Our approach to managing private accounts is unique and the reverse of the approach other firms take. Most pursue unbridled growth, with no risk controls or defensive strategies to protect you from terrible market declines. The priority of risk controls and defensive strategy has always been the foundation stone of long-term wealth. Academic research and generations of actual experience support this approach . We believe this is the correct and best approach for an independent financial advisor who intends to serve clients well.

The secret of investing no one talks about is that most investors don’t get the results shown in mutual fund reports. Surveys show investors consistently invest in winners after the gains have already been made –  just in time for a drop in the markets.

This also reveals the problem with most independent financial advisors and the investment advice in financial magazines: most portfolios do not protect investors. Great investment management begins and ends with a commitment to protect your money.

Rule #1: Don’t Lose Money

Rule #2: Don’t Forget Rule #1

- Warren Buffet

The RLC Way of Being a Great Independent Financial Advisor

Independent Financial Advisor

Great Portfolio Design™ balances all three dimensions of investing so you can reach your goals comfortably

The RLC Way seeks to balance all three dimensions of investment success so you can reach your goals comfortably. You don’t have to settle for a simple approach that exposes you to too much risk or leaves you with too little growth.

This is an excellent choice for retirement and for all serious investors who want to balance growth and safety in order to preserve their wealth.

The bear market that started in 2000, shows the flaws of the common, “asset allocation” systems  used by independent financial advisors that take no action when their clients are losing money.

We place these approaches in the failed category. These “asset allocation” systems from the 1970s and 1980s, lost 30-50% of investors’ money – not just once in 2000, but a second time in 2007-2008. This created untold hardship and suffering for investors who believed the independent financial advisor who sold these computer generated systems. We don’t doubt the advisors themselves believed in this approach. Unfortunately, for investors, they were based on a faulty premise and had no safety controls – and still don’t. Fee only financial planners begin well, with an elimination of the conflict of commissions, but frequently  fail their clients when it comes to creating investment strategies that are founded on research and wisdom and thoroughly tested against multiple scenarios.

» Maybe this was your experience before visiting us. Read on and then contact us for a better way to invest.

The Forgotten Jewel of Great Investment Management – Livability

Livability – creating an investment result clients can easily live with over an extended time is the Forgotten Jewel of Great Investment Management. Livability turns anxiety and fear into confident, peaceful investing.

Our investment philosophy, “Make it. Keep it. Live Well,” expresses our commitment to these three dimensions of investment success. A successful investor needs all three parts to create financial security and expand their wealth. Unfortunately, livability never enters the thought process when you visit the average independent financial advisor.

No strategy is perfect. If you are an investor, you will at times have losses. There is a difference between large and small losses. Small losses can be recovered quickly. Large losses may take years or even decades to recover. Our commitment is to create portfolio designs that limit the size of investment losses.

We’ve seen computer reports from asset allocation systems. Very colorful and impressive. We’ve also seen the results in real time. Not impressive at all. A computer report is no better than the underlying data and assumptions. Frankly, if an independent financial advisor is still using this method from the 1970s and 1980s, they are not keeping up with the advancement in investment management

There is no magic formula to great investment management and a computer can’t do it. The computer is simply a tool to test and examine these competing factors that go into creating an investment management strategy. What a computer can do well, is take a model and look back historically to determine how it would have performed in all types of market conditions. This is how an independent financial advisor uses the computer as a tool and not a master.

Great Portfolio Design Seeks to Blend Conflicting Factors to Balance Growth and Safety

Great Portfolio Design doesn’t start with asset classes or types of investments, like mutual funds, ETFs, stocks, bonds, etc. It starts with the Big Levers that will play the greatest role in balancing growth and safety in your account. These levers include:

Successfully blending these conflicting factors is the crux of Great Portfolio Design

  • Safety Controls – multiple ways to limit risk exposure to what a client is comfortable with and no more
  • Full-Cycle Performance – total return from all sources over many time frames – not simply raw performance over a short time
  • Stability – low downside volatility of the entire account value
  • Market Identification – a process to classify the market we are investing in today in terms of return potential and risk exposure – they’re not all created equal and we don’t pretend they are
  • Cost – not overpaying per unit of total return
  • Diversity – not highly concentrated in one asset class, one security, one time frame, or one strategy
  • Flexibility – ability to adjust to widely varying market conditions and still deliver good results

The Great Portfolio Design Process Produces Investment Livability

Livability is an investment result our clients can easily live with over extended times to reach their goals while enjoying the journey.

Successfully blending these conflicting factors is at the crux of Great Portfolio Design. This always involves making a series of choices – reasoned trade-offs – that you can live with over time to accomplish your goals without taking years off your life.

An independent financial advisor must be aware of the benefits and trade-offs each of these factors impart to the portfolio as a whole. But that’s life. Reasoned compromise is essential in every field of human endeavor. You can’t have unlimited speed and have total safety at the same time. A Ferrari and a Volvo are two very different vehicles. One great for speed. One great for families. Choose one.

Great Portfolio Design Must be Combined With Actual Investment Management Experience

Theory and testing are one thing. Creating a final result that accomplishes your goals is another. To do this requires real life investment management experience through many kinds of markets.

dominoesBy “real life investment management experience,” we do not mean “rebalancing an asset allocation.” That isn’t investment management. That’s just standing up your fallen dominoes for the next market correction to knock them down all over again. Hardly the stuff that an independent financial advisor will use to make decisions. You are far better off using the 4th generation of portfolio management that includes risk controls.

Exposure to many market conditions and making thousands of decisions is the required background for an effective independent financial advisor. Experience in actually managing money ultimately creates a better portfolio for clients. It combines the theoretical design constraints with realities the client will face, day by day over decades.

We have been at this for decades, in many markets and in using many investment types. We believe that this active management approach offers the investor the best combination of features for accomplishing long-term goals and have been dedicated to developing the most advanced portfolio designs for balancing consistent returns with safety.

This is the RLC Way

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