Senior Director of Sales
Regional Chief Investment Officer - Southeast

Senior Director of Sales Paige Green and Regional Chief Investment Officer Dave Roda, CFA discuss goals-based investing and how it may help you weather constant market fluctuations.

Audio: Goals-Based Investment Planning: More than a One-Time Event

Transcript: Goals-Based Investment Planning: More than a One-Time Event

Interviewer: Paige Green, Senior Director of Sales, Wells Fargo Private Bank
Interviewee: Dave Roda, CFA Regional Chief Investment Officer, Wells Fargo Private Bank

Paige: Hello, my name is Paige Green. I'm a Senior Director of Sales for Wells Fargo Private Bank. It's easy to become fixated on day-to-day moves in the financial markets, but is there a better way to invest? Joining me to discuss goals-based investment planning is Dave Roda, Regional Chief Investment Officer for Wells Fargo Private Bank. Dave, thanks for coming.

Dave: Thanks, Paige. It's great to be here.

Paige: Alright Dave, let's start with the basics. What is goals-based investing?

Dave: Paige, it's simply a strategy for building a diversified portfolio around an investor's goals, rather than creating a single "one size fits all" portfolio strategy. By understanding what you want to use the money for, we can design an investment strategy for each goal that takes into account when you will need to draw on your assets, and how much risk you can afford to take with your investments to potentially get the return you're seeking. 

Paige:  I get it. So this approach will create a multi-dimensional portfolio rather than one that's focused on a popular benchmark, such as the S&P 500 Index.

Dave: That's right, Paige. While some high net worth investors have multiple financial goals that can be efficiently accommodated within a single investment portfolio, for many investors that's just not the case. Often assets need to be segregated into different accounts or legal ownership vehicles to help optimize the investment design or tax efficiency, or to address beneficial ownership requirements.

Paige: So really what you're saying is the focus is on the client need vs. market performance.

Dave: That's so true. In our view, the discovery process that we undertake with our clients as we review their needs is a little like a financial physical exam. And, like a physical exam you would have with your physician, your investment plan requires regular checkups in order to help keep the advisor updated on your vital financial factors, and any changes in your personal circumstances that may affect your goals.

Paige: But Dave, would this regular checkup be needed if the investor's goals haven't changed or they're only marginally different from the previous meeting? 

Dave: Yes, these regular checkups are a really important element of goals-based investing. While a client's financial objectives may not shift, economies and markets are in a constant state of flux. Opportunities and risks across asset classes can rapidly shift based on changing economic variables, policy moves, valuations, and a host of other catalysts.

So keeping the portfolio calibrated to long-term return and risk targets typically requires a dynamic investment process that involves robust analysis and forecasting, thematic and tactical investment overlays, and a highly disciplined diversification and risk management methodology. In our opinion, "set it and forget it" strategies cannot fully compensate for changing market factors.

Paige: In your experience, would you say that this goals-based approach can help investors stay focused in volatile markets?

Dave: Our experience strongly suggests that investors with detailed, updated financial plans are much more likely to remain committed to their investment programs over time and, therefore, are more likely to achieve financial success in the long run.

Paige: Versus potentially making investment decisions based on the current direction of the market.

Dave: Exactly.

Paige: Alright Dave, as always, thanks for your perspective. And to our listeners, talk to your investment professional or contact us if you think it's time to schedule your financial physical. Thank you for joining us.