Neigeborn, 35, loves his work, which hes been doing for more than a decade. But its stressful right now, because clients are more worried about their investments.
I am originally from Long Island, New York. I went to school at the University of Albany. Originally I was going to be studying psychology, which became my minor. I fell in love with American history; I studied it at the undergraduate and graduate level. I went on until I was about to complete my masters thesis and my grandmother talked me out of it. She sat me down and said, Honey, teaching on a college level youre going to be broke and youre going to be unemployed a lot and this is not for you. And I said OK. I was about 23. So my background was in academics, and I had not taken an economics class in college. It is interesting to find that many of us have not; we have lots of varied backgrounds. I traveled for a little bit after school, not really sure what I would do, came back. I came back to the states when I was 24. I had spent a little time overseas. I got a job in the telecommunications industry, which at the time was booming. I did that for about a year and this was at the height of the technology boom in the late 90s. I came down to visit some friends in Atlanta, fell in love with the city, packed my bags and came. This was 1997. At the time, Prudential was hiring financial advisers. I had enough of a push to want to take on a very challenging job at 24, 25. I didnt quite know what I was going to be getting myself into. It turned out to be a lot more challenging than I fully expected.
What is a typical day like for you?
Typically Ill wake up in the morning about 6 oclock. The first thing Im going to do, even before I have a cup of coffee is Im going to see what happened over night. Asia, Europe and Eastern Europe Im going to check the international markets to see what Im in for. I tend to read glancingly four or five different papers New York Times, Wall Street Journal, and Washington Post. I read the New York Post for fun I get a little homesick. Typically [I read] just basic news, opinion pages, that sort of thing I want to know what is going on in the world. A lot of what I am going to read has nothing to do with finance. Clients have questions with regard to broader issues that might affect them. I am going to do what I can to keep up with whats going on out there. I get to the office maybe 8:30, 9:00 and Ill read everything at my desk with regard to my firm. My firm is going to update me on whats going on out there with regard not only to the markets conditions [but also] things to look for with regard to clients you know what they are seeing on the horizon, what we can be assisting our clients with. After 9:00 my whole day is going to be spent on the phone talking to clients and prospective clients or out and about meeting people. I typically work three nights a week. Times like this you work a lot later, cellphone stays on pretty much 24/7.
What are some things you advise people on?
The vast vast majority of people, even at higher income levels, are getting bombarded with the same concerns how do I retire, how do I take my kids through college, how do I pay for that, how do I protect my family god forbid something happens to me and Im not able to earn. In many cases my clients are getting sandwiched. They are 55-60 years old. They earn good income, theyve got some money in the bank but they are worried about their parents who are retiring and they are worried about their kids who are going through college. And theyre worried about how they are going to retire themselves. Theyre getting hit on all ends. So a lot of what I do every day is helping people address how do you navigate that, how do you juggle that, how do you do it all, can you do it all, how do you prioritize, and what are the resources available to tackle these things. I would venture a guess that upwards of 95 percent of the public, no matter what their income level is, is getting hit with the same things.
Whats your philosophy on the economic downturn?
First, while every one of these situations is a little bit different. Weve seen multiple downturns since the end of World War II. This isnt the first time weve been in an economic downturn. Its not even the first time in the last 10 years weve been in an economic downturn. The first time I saw one was in 1998. The Asian banks failed. The Russian economy had some serious trouble and eventually just pulled into our bank system and the market got walloped. They nicknamed that one the Asian contagion and that was 1998. It was short lived but it was very scary. In 2000, 2002 we had what we nicknamed the tech wreck when the internet bubble burst. That was also a very, very scary time for investors. And then it was coupled with 9/11 in 2001. So first you start the 2000 downturn with the tech wreck then you get into 9/11 and then just as were coming out of it we get hit with Enron, Worldcom, the accounting scandals of Andersen Consulting. Here we are five years later and weve got these new problems regarding extension of credit which, in a nutshell is a lot of people borrowed a lot of money both on the corporate level and on the individual level that they couldnt repay. The banks lent a lot of money they shouldnt have lent. Thats it in a nutshell. Lots of bad loans on both ends. People took the money, whether corporate or individual, banks loan the money, whether corporate or individual, and a lot of people cant [pay] it back. This stinks. This happens. Economic downturns happen. This is a particularly nasty one but they occur. I think that it reminds everyone that whether you be investing in real estate, small business, or the stock market, you need to make a long-term view. I think investors who are investing short-term in any of these vehicles are getting a very ugly reminder as to why these need to be long-term investments, why people need to be thinking about 10, 20 years out not [about] what happened in the market today. My philosophy is ideally, people kick the tires, make sure their investments are appropriate for them, based on their age, their risk tolerance, what their goals are. If theyre not doing it on their own, find an adviser to do it with. Once you put the investment plan in place, stop watching CNBC, stop watching the television, and take a step back. Take a long-term view. Typically, historically, every other time weve had one of these weve come out of it. And this is not the first time. Weve had other disruptions. Every one of them feels like the first time. They feel terrible. But historically weve had these 73, 74 weve had these. Thats my philosophy on it.
How is the nature of your advise changed since the downturn?
I dont want to think the nature of what Ive advised clients to do has altered in the least. Take the long term view. I would take your assets based on your risk tolerance, on your age, on your goals, make sure youre diversified, try not to get involved in the day-to-day events of the stock market or the news, take a step back thats all identical to what it was 12 months ago. Whats changed is that Im out there with all my clients revisiting and seeing if are the goals still the same? After something like this if the client is still comfortable with the markets are they addressing or adjusting their goals in regards to markets, what their expectations are, have they become more conservative after something like this, have they become more aggressive after something like this, and I see both. I see both. I see clients coming in here and saying, Hey, this looks like a fantastic opportunity and I see clients coming in here and saying, Hey, Im very very concerned about the future. So the biggest difference in my practice is that its almost like halftime in a football game that has not had a very good first half. Were back in the locker room. Were sitting down with everybody and saying, OK, what adjustments do we need to make, if any, based on what your goals are, where you are in your life. Last time we went through this was six or seven years ago, were further along now. So I guess the big thing is just making sure that my clientele are properly allocated and nothing has changed for them, and if something has changed for them a life event, or [theyre] close to retirement, they feel like being more conservative or more aggressive we adjust the portfolio appropriately.
Are you still telling people to invest?
It depends on the client. The answer is yes. But what to invest in absolutely depends on age, risk tolerance, goals. It depends on what were talking about investing in as well. For some investors they need to be looking toward the bank they should be looking towards CDs, they should be looking towards more cash-oriented vehicles. By all means, if Ive got clients sitting in a checking account Im trying to find them alternatives to that. But, the stock market, I still strongly believe, is an appropriate growth vehicle, long-term, for clients who are taking a long-term view. Those who are older, who are closer to retirement, it may be a different conversation. So I guess the answer to your question is it absolutely depends on the client, where they are in life, and do they need the money in the next six months. Do they need the money in the next twelve months? So its just making sure that investors have realistic expectations and an understanding of whats going on. I can tell you in my own accounts I continue to purchase in my own accounts. But Im 35. You know, its just a matter of making sure that anyone whos making investments here is taking the long term view.
Taking all your clients into consideration, have a lot of people lost money?
I guess the answer to that question I would give every single stock market, as of a week ago, on the planet, is negative in 2008 with the exception of the country of Ghana. So anyone whos invested broadly and diversified in the stock market is most likely experiencing a lower portfolio balance than 12 months ago without going specifically to my clientele. I think that investors who have broadly diversified portfolios the market is down over 40% since last October, so the clientele who are invested across a wide variety of assets equities, bonds, real estate are experiencing a lower balance than they were twelve months ago. At this point I tend to agree with something Warren Buffet has said, which is to paraphrase You havent lost until youve sold. But you know, weve all seen lower balances, I think thats fair. My primary concern as an adviser is how are those lower balances which many people are experiencing, how does that affect retirement plans, education plans, and lifestyles. What is very sad to see out there, again not referring to my specific clientele, but to see people who are going back to work. To see people who are delaying their retirement plans for a few years because the growth has not been what they expected. Thats my concern. Again, the day-to-day fluctuations of the stock market its only so caught up you want to get in that. The real end result of what we are experiencing is that peoples goals are now being achieved in a way we hadnt expected 10 years ago, 15 years ago when they went to work, investing. Not specific to my clientele, but towards the broader economy. Thats the worst thing out there.
How does this affect your business with these clients? Have you lost money as well?
To give you an idea about how something like this affects someone in my role first, Im invested in the stock market. My portfolio is down alongside clients portfolios that are down. So its a very tough environment for investors. How does that affect me? These are retirement moneys. I am not retiring for 30 years. So it really doesnt affect me with regards to my investment portfolios being down. Now as far as my day is concerned there is going to be a major effect. Typically Ill work 35 to 40 hours a week. Im probably doing 65 to 70 now. Its the equivalent of being a fireman and someones pulled the alarm. So this is our time to be all-hands-on-deck. People in our industry are out there youve got to be with your clientele, youve got to really typically I have to be very very careful to watch my health and watch my weight and watch my exercise routine and just take care of myself, just normally because it is a high-pressure job. In times like this, youve got to be very very careful. You just might have a tendency to overwork. Universally its a New Yorker thing. But people have a tendency to overwork. People are trying whatever is required to attend to our clients needs. So, instead of, again, normally my cellphone would go off at 7 or 8 at night I got knocked out of bed at 5 am the other night. So, you better be ready to take those calls. People are nervous; you need to be accessible. My hours have multiplied. Income-wise, I am very very fortunate. My practice will, actually, probably be slightly positive this year. I have attracted new clientele. On the individual level I am fortunate, I will most likely be positive this year. So income-wise, less of an effect. Work-hours wise its a mushrooming affect. This is a time when people in our line of work need to really, really be out there, focused on what clients need and addressing clients concerns, and answering as many questions as we can, and if we dont know the answers going and find those answers. So, we need to be out there.
Have you had any unusual experiences?
Oh god! Yes, Ive had a number. Ive worked with a few mad scientists over the years. Thats always entertaining. Sometimes this line of work will attract some very very brilliant and eclectic people. My mentor, who I look back on as a mad scientist, the guy did this for over 25 years when I met him and I was 24 when I met him. He was a social recluse. He had a sleeping disorder so he used to fall asleep at his desk. He would fall asleep mid-conversation. I guess it was the stress of the work. Unfortunately he wasnt in the best health, he passed away later, but thats kind of a seg-way. Just a combination of being an anxious person and the stress of the business kind of wore him out. He was a genius. He could just do things with investors I had never seen before. He would pull numbers out of he was like working with Rainman. Ive never seen anything like it. He could find investments just by scanning the newspaper and picking them out of a hat. He would find these out of nowhere. You would wonder where he found it he was reading some, like, Car and Driver, who knows where he found this stuff. But he was right more than any financial adviser Ive ever encountered. He was stunning to watch because half the time you would see this reclusive guy and I was the only person in the office he really spoke to, you know I was a kid, I needed help. The rest of the time he would just stay by himself, and he would fall asleep at his desk and he would come in at the end of the day and work til 11 oclock at night he would show up at five. He worked reverse hours. Clients would know to reach him after hours. Something would happen to him in bad markets, which was really remarkable. He would go from being this really tired, worn-down guy he would just come alive in a bad market. He just knew what to do. Whether it be 98 or 2002, he just knew how to handle it. Tremendous personality, taught me everything I know. We worked together for a few years. Like I said he passed away at an early age, probably stress related. In recent months Ive gotten calls from friends and family Gary, dont you want to do something else for a living? And there have been days. About a month ago when this really started to kick into high gear, I went home to have lunch with my wife as I often do, and I turned to her and said, Honey, this is getting to be a lot. Maybe there is something else I need to be doing for a living. About an hour later I go back to the office and got a phone call from a client of mine thats been with me for 11 years. He was one of my first clients. He said, Look Im going in for extensive heart surgery on Saturday, and hes choking up, hes in tears if for any reason I dont get off that table please take care of my wife and my family the way you took care of me these last few years. I didnt know what to say, except you know, Of course I will do the very best I can. Every now and again and thank God hes OK you get a phone call like that and it remind you of why you do this. So as far as client experiences are concerned, those are the ones I take with me. Thats the hardest part of the job if youre doing this right youre very close to the clientele. If youre doing this right youre involved with their families. Ive been to my share of funerals and its awful. They become your friends. Im as close to my clientele as many of my own family, except my wife of course.
Has a client ever had unreasonable expectations?
Oh, yeah. You get that every now and again. Since 1998, weve had a few downturns so people are much more reasonable in their expectations. Ill give the CNBC crowd some credit: they have done well informing clients what a reasonable expectation is in the marketplace. I had a client in 1999 who I walk in one morning and I see an account transfer out the door. I had done a nice job for him, he had made over 37 percent the prior year, and I walk on in and think that doesnt make any sense. Typically there is only three reasons why a client would pull an account either they dont like your firm, they dont like you, or they dont like the portfolio. So I call the client up and I say Hey I saw you were transferring out. What happened? He just said he felt like he had a better situation elsewhere. I said, Well, was it my firm? He said No, no I like Prudential. I said Did I do something? Did I say the wrong thing? Maybe an off-color joke I shouldnt have made? What did I do? He says No, no I like you. said Well it couldnt have been the portfolio. He says, Actually I was pretty disappointed. I said, But you did 37 percent last year! He said, Well, my 401k didnt double that. I think I could do better on my own. And I just said, Look, I cant help you. So yeah it happened a lot at the top of the Internet bubble when people were making money hand over fists. Expectations of us got so high. Were not here to make people rich; were here to keep them from being poor. Were here to grow wealth at a slow, steady, consistent rate. We help our clients on the downside when there are events like this. I feel pretty comfortable that in 25 or 30 years, youll see this again. So, you know, its very important that we are protecting people on the downside, but yeah, I have run into some unreasonable expectations. As Ive become more experienced as an adviser, I try to wean those out when I sit down with people. Get a feel for what theyre expecting. Oh you know Gary, just be conservative, double my money in twelve months and well be fine, that person needs to be either reset as to what we can and cannot do, or passed over as a potential client. I have not had a single client during this downturn, not a single one, who has said something that I though was outrageous from an expectations standpoint. Not a single one. I think people understand.
(photo by Joeff Davis)
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