Getting Back to Basics

By Thomas Twombly, President

Summer is a great opportunity for our team to reflect, and to focus valuable attention on ways of improving our overall interactions with clients. With a few new folks at Lucien, Stirling & Gray, we have been putting effort into “getting back to basics,” which is also helpful for our senior advisors to revisit. What do we consider the “basics” of our business? Our core philosophy can be summed up by answering these two important questions:

Why does a successful individual or family need a financial advisor?

Why should they hire Lucien, Stirling & Gray?

Interestingly, the answers to these questions are not what most people think.

Successful people don’t need a financial advisor foremost to create a brilliant portfolio, and not even primarily to manage their money.

How’s that for an odd statement coming from a Registered Investment Advisor…? Let me explain.

More than anything else, successful people need an advisor to help them mitigate that sense of anxiety and fear that often surrounds money and financial decisions, and to replace it instead with a sense of comfort and confidence. They benefit foremost by clearly defining what their financial responsibilities and obligations are, in addition to their goals and objectives, and by determining exactly what their money is for. And then, by having accountability partners who provide well-designed processes to make sure important things get done in a prudent, consistent way, they gain a sense of organization, purpose and control.

Portfolio design, asset allocation and periodic rebalancing are certainly crucial parts of that process, but more important by far are the strategic attention their advisory team pays to their changing circumstances and lifetime objectives, the accountability and behavioral investment coaching they provide along the way, and the targeted financial planning expertise they offer at critical transition points and periods of change and uncertainty. The value that a trusted advisory team brings to the table, therefore, is often most critical in the all-too-common financial and investing mistakes they help their clients to avoid.

Good advisors never promise consistently to “outperform” some index, and they certainly don’t promise clients they’ll never experience periodic declines in their portfolios. In fact, one of the few promises a trustworthy advisor can make to a client is that if they remain a client long enough, they will surely experience a number of those declines – some of them quite sharp and scary. The other crucial promise they can make is that when those declines inevitably occur, their advisory team will be there – attentively listening to their concerns, resolutely revisiting their most important objectives, calmly reminding them of their goal focused plans, and carefully guiding them through whatever challenges present themselves.

With all those responsibilities to fulfill, an advisory team itself must be stable, professional, highly principled, and deeply committed to the success of others. Above all, that team must be trustworthy, and it must demonstrate that trust in every aspect of its operations. It must understand at the most basic level what value it brings to the table, and it must consistently make good on that value proposition.

And that’s the primary reason we believe people should hire Lucien, Stirling & Gray.

As long-term investors ourselves and as an advisory team that has worked together for many years, we’ve successfully navigated any number of challenging times alongside our clients. Our professional support staff, too, is experienced and long-tenured. Most importantly, we work in a collaborative, close-knit environment that fosters a unique sense of trust in the relationships we have with each other, and with our clients.

So one of the performance numbers we’re most proud of is this: during one of the darkest five-year periods in our investing lifetimes, measured from the market peak of 2007 through the depths of financial crisis of 2008 – 2009, and through the fitful recovery to June of 2012, more than 97% of our clients remained on board with us. They followed our advice and resolutely stuck to their plans. Like all of us, they experienced sobering declines during the darkest of those days. But they, and we, have prospered subsequently because together we maintained the patience and discipline to see it through, and the trust that made that possible. And that tradition continues today.

Here is another newsworthy item: earlier this month, for the 6th year in a row, Lucien, Stirling & Gray was named by The Austin Business Journal as one of Austin’s top 10 “Best Places to Work.” This year we came in at #2 in the 10-20 employee category.

Given the acute challenges faced by our profession, these are rewarding accomplishments. We’re proud of these honors, and of the trust and confidence to which they speak. We look forward to sharing these unique benefits with all of our clients (longstanding and brand new) for a long time to come.