Should individuals and businesses be managing their wealth differently in a downturn, than they would if the economy was in better shape?
Yes, much more attention needs to be paid to both the cash outflows and inflows in their financial life. Unnecessary expenses, whether they are individual or business, should be minimized or eliminated to create the greatest amount of net income possible with the lowest overhead.
NorthStar seems to take a comprehensive approach to financial planning. Why is that better than the traditional transaction-based approach? Is the comprehensive approach more important in a down economy?
We have believed for many years that a truly independent, comprehensive approach to financial and business planning is much more advantageous than a one dimensional, transaction based approach. Ultimately when a client, whether business or individual, sees their financial picture mapped out using our comprehensive format, it provides confidence and allows them to stay focused on their day to day activities. When the economy is in a downturn as it is now, transaction based planning becomes very reactive. With a more comprehensive planning approach, we are much better suited to take proactive steps necessary to mitigate losses in income, net worth and future business.
Should people be hoarding cash right now or is it a good time to start investing again?
This really depends upon a person’s time horizon, risk tolerance and very specific financial make up. Ironically, this rule should be adhered to not only during times of economic downturn but during any economic climate. Even the best investment can be a problem if it is used with a client that is not an appropriate fit.
You are currently a partner at NorthStar Planning Group. What do you do in that role?
I, along with my partner Brandon Marinelli, create a balance between working with our own individual and business clients, assisting current associates and recruiting additional associates to the firm, and marketing and promoting Northstar Planning Group. In recent times, there has been a flight to independence which has created a great surge in both acquiring new clients and advisors.
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