Financial adviser preaches savings, not returns
Ask Ronald S. Rosbruch what the biggest problem currently facing the financial sector is, and chances are you”™ll get an unconventional answer ”“ particularly coming from an adviser at one of the county”™s largest financial planning firms.
“Everybody got greedy for returns,” said Rosbruch, a partner at Strategies for Wealth in Rye Brook. “That”™s a dangerous play. Chasing returns never made anyone wealthy.”
Ever since the boom years that followed the 2001 recession, Rosbruch said, the conversation in the financial planning industry has largely focused around maximizing returns on investments.
At Strategies for Wealth, a subsidiary of The Guardian Life Insurance Co., a different philosophy prevails.
“We believe in protection first,” he said. “We”™re going to protect our clients, their ability to have a future (and) their assets.”
By prioritizing savings and only then focusing on investment management, Rosbruch said Strategies for Wealth and its clients have done remarkably well despite the stagnant economy.
“We”™ve had our three best years in our history in 2009, 2010 and 2011,” he said. “We didn”™t need any TARP money and we didn”™t have to lay off any people.”
Over the past several years, the firm has hired some 20 new field representatives each year and Rosbruch said he expects that trend to continue.
“Assuming crazy stuff doesn”™t happen” ”“ such as an implosion in the European debt situation or a major natural disaster, Rosbruch said ”“ “I see only strong, continued growth years for us. I think we”™ll continue to hire 20 to 30 new associates every year.”
Rosbruch hasn”™t had a bad year himself: in March he was honored by GAMA International, a membership organization that specializes in the professional development of leaders in the fields of insurance and financial services, as its 2011 Management Hall of Fame inductee. Every year, one recipient is inducted, which is considered to be one of the financial industry”™s highest honors.
What”™s in store for 2012? Rosbruch said he has no crystal ball to predict which way the economy will be headed: “I haven”™t a clue. But it can”™t be positive.”
While the European debt crisis and uncertainty surrounding the U.S. economy have not made financial advisers”™ jobs any easier, he said the over-speculation and over-emphasis on returns is precisely what has hurt the industry.
“The conversation that is being had is ”˜How do I maximize my return?”™” he said. “The correct conversation is, ”˜How do I save more of my gross income?”™”
Strategies for Wealth often advises clients to save between 15 and 25 percent of their gross income by restructuring how they handle their money. By boosting savings, Rosbruch said, clients no longer need to worry about whether their investments are delivering high returns.
“No one gets rich from having the better money manager. It”™s not the way the game is played,” Rosbruch said. He added that over the last 10 years, after subtracting taxes and accounting for inflation, “the return on the market has been zero. If you were chasing returns you really didn”™t get very far.”