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By Philip Walzer, The Virginian-Pilot, June 8, 2008
Original article here
For every client he’s lost in the past few months, certified financial planner Reginald Corinaldi figures he’s gained five.
“Any time there’s any kind of trouble or uncertainty with the economy, people tend to get dissatisfied with their current plans or look for new advisers,” he said. “It’s actually a net positive for us.”
He likened the mood of investors to hurricane preparedness. No worries in calm times. But “when you know a storm is coming, you’re going to check your batteries and see if you have enough water,” said Corinaldi, a co-owner of Financial Security Cos. in Virginia Beach.
His new clients, he said, are about evenly split between those leaving another adviser and those hiring one for the first time.
Despite the perpetual domino effect in their client base, financial advisers such as Jim O’Brien, with Edward Jones in Nor folk, and William Sheavly, managing principal of Sheavly Financial Group in Virginia Beach, report a steady increase in customers.
“There were times, like the late ’90s, when everybody was an expert, and they didn’t need professional advice,” O’Brien said. “And then they find out they aren’t an expert. They make mistakes and they seek out professional advice.
“They feel more vulnerable,” he said. “That’s what you’re seeing to some extent now.”
Jim Flinchum, managing principal at Bay Capital Advisors LLC in Virginia Beach, predicted an upsurge in clients will come later in the year, “when we hit the apparent bottom of the recession.”
“We won’t have to chase them; they’ll have to chase us,” Flinchum said. “Right now, they’re terribly terrified. They’re frozen. They’re waiting to see how bad it’ll be and how they can be spared this terror in the future.”
Flinchum said most of his longtime clients are not besieging him with calls. The ones with the jitters are the “newly affluent.”
“If a person is newly wealthy and has never been through a recession,” he said, “this is a terrifying experience for them. We do a lot of hand-holding for those people.”
Expectations are mostly diminished on both sides of the table during a downturn, planners say. “For a financial adviser,” Sheavly said, “it’s as much if not more important not to lose the client’s money as it is to make money.”
Clients, Corinaldi said, “are most demanding when the market is good. 'This fund went up 30 percent. How come mine only went up 20 percent?’ ”
Staff writer Tom Shean contributed to this report.
Philip Walzer, (757) 222-3864, phil.walzer@pilotonline.com
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