Q: I know what it feels like to be an investor in this environment. It is terrible. However, since much of today’s problems are related to the collapse of Wall Street, Banking and financial services, how does it feel to be in the investment management business right now?
A: Thank you for your question. The short answer is: It is very difficult. Yet, we were trained – when things look adverse – to help others and to be problem solvers. When we place our focus on helping others who may be less fortunate, our difficulties appear smaller. When we focus on problem solving, rather than on how the problem feels, we move toward solutions. We believe this is the right formula for our organization, and it could be the right one for our country as well.
In circumstances like these, which developed from a series of false statements, wrongdoing, congressional failures, regulatory failures, excessive greed coming to light, and then, pervasive fear, it becomes prudent to adopt a “prepare for the worst but expect the best” approach.
We have prepared for the worst in many ways. We continue to rely on LPL Financial to be our custody broker-dealer, the most experienced and best managed in this area of business (in our carefully considered opinion). We continue to attract new assets, new clients and new financial advisors with deep experience. Given the circumstances, our business is healthy. Yet given our experience, we do not take success for granted.
Philosophically, we decided long ago that we wanted to be on the same side of the table as our trusted clients. Therefore, most of our business is fee-based, rather than commission-based. This means that we are “in it” with our customer. When the market is healthy, we both feel the wind at our backs. But when the market makes a once-in-a-lifetime downturn, we both feel its full force. Importantly, we council our clients to stay invested and to not sell out at the bottom. They are therefore, in a position to experience a recovery. On the other hand, the revenues that we lose in a bad market condition are lost forever.
Some might say that if the market is cut in half, then we deserve to have our business revenues cut in half too, because we have less work to do. Ironically, we actually have more work to do. Good markets are forgiving and investors are naturally happy. However, in this market, we must be doubly careful in every decision we make. We must spend many more hours counseling clients, and researching a changing landscape.
Our job is probably twice the challenge in a market like this, our responsibility to council our clients wisely is far greater, and the decision to act – or not act – is far more stressful. Further, we must be compassionate and we must be good listeners.
However, we are in this business of our own free choice, and of our own free passion. Moreover, we are truly grateful to live in a country where such freedoms exist. Opportunity is abundant. Yet, this is the most difficult environment, in nearly every way, that even the most experienced have seen. It is our belief however, that this is when our clients need us most. And while it is financially taxing, we know our reason for being has never been greater. But like challenges of the past, we expect today’s circumstances will bring an even stronger bond between our organization, and our clients, which we are deeply committed to.
In conclusion, we encourage you to be mindful that this too shall pass. If you believe in America, you believe in the future. We do, with conviction. Thank you again for your question.
– Christopher S. Channer, Founder
Note: Our condolences to those who were long-term loyal employees at one of the fallen firms. Many hard-working people not only lost their jobs, but also had much of their net worth in the stock of the company they worked for. We also offer our condolences to those who were affected by the Ponzi schemes that have come recently to light. These situations are sad beyond description, and are the ultimate reminder that if you have all of your eggs in one basket, or if you reach for returns that are “too good to be true”, you are taking huge and unnecessary risks.
© 2009, CHANNER INVESTMENT MANAGEMENT, INC.
SECURITIES AND FEE-BASED ACCOUNTS OFFERED THROUGH LPL FINANCIAL
MEMBER FINRA/SIPC A REGISTERED INVESTMENT ADVISOR
A Channer University Publication™
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.2-27-09