Engineering Financial Advice

Just as Brant Greene didn't rely on chance when he was designing torpedoes in a prior career as a government engineer, he doesn't roll the dice when it comes to clients' money.

"I try to ring out the luck factor by being smart and using engineering principles," says Greene, CFP, a senior financial advisor with Ameriprise Financial.

He can't engineer all the risks out of investing, but he emphasizes to clients the need to set realistic goals, invest conservatively, spend within their means, and save--in other words, to do the things they have the power to control, and not sweat the stuff they can't, such as short-term performance numbers. The key, Greene says, is for clients to keep their eyes on their long-term goals.

"If you have a poor financial plan," he says, "performance will not bail you out."

Clients Get the Plan
The foundation of a good financial plan, Greene says, is accuracy in measuring a client's risk tolerance. For this, he uses the Risk Assessment in Morningstar Advisor Workstation Enterprise Edition, which he uses through Ameriprise. Based on the results, he then establishes a benchmark of how much of a client's portfolio should be divided between equity and fixed income.

On the equity side, Greene likes to cover every area of the Morningstar Style Box in the portfolio, and he keeps the most aggressive categories, such as emerging markets and international bond, at less than 5% of a client's assets. Greene considers himself an index guy. To gain broad exposure to the market, he uses Vanguard index funds and is a big believer of ETFs for their low costs and tax efficiency.

For the bond portion of a portfolio, Greene says that he likes to have a little bit of everything. He uses Vanguard Total Bond Market Fund BND and other bond ETFs available through iShares. He also has clients in Fidelity Advisor Strategic Real Return FSRAX and Oppenheimer International Bond OIBAX.

Once the investment selections are in place, Greene uses Advisor Workstation to monitor and manage the portfolio. He generates more than 500 Portfolio Snapshot reports every year to help him determine where to dial- down or -up a client's portfolio.