Conway Wealth Group at Summit Financial Resources Inc.
Michael Conway is founder and CEO of Conway Wealth Group LLC at Summit Financial Resources Inc., a premier, independent financial planning and advisory group. He is a Principal of Summit Financial Resources and serves on the company’s Board of Directors.
As a successful and well-respected financial advisor, Michael has spent more than 30 years building his own practice and providing clients with specialized solutions that blend financial and estate planning strategies with open architecture investment management.
Michael’s clients include successful entrepreneurs, corner office executives, CEOs, CFOs, Wall Street professionals, professional athletes, and others—all with significant wealth tied to their businesses or employers. Michael is creator of The Conway Integrated Wealth Solution™, a unique financial planning process that aligns families' wealth with aspirations and financial goals.
Michael is a member of the Financial Planning Association, and has earned Certified Financial Planner® and Chartered Financial Consultant® credentials. In addition, Michael is frequently looked to as an expert in financial news media, and has been featured in various publications, including Barron's, the Wall Street Journal, Investment News, and Investor's Business Daily, among others.
Michael has three children and lives in New Jersey with his wife, Leslie, and two dogs. He enjoys church, backpacking, scuba diving, and horseback riding.
The American College (ChFC)
The College for Financial Planning (CFP)
CONWAY WEALTH GROUP, LLC is owned by Michael W. Conway who offers securities and investment advisory services through Summit Equities, Inc., Member FINRA/SIPC, and financial planning services through Summit Equities Inc.’s affiliate Summit Financial Resources, Inc. 4 Campus Drive, Parsippany, NJ 07054. Tel. 973-285-3600 Fax 973-285-3666 Direct Office Tel. 973-285-3640
Wealth Protection & Financial Planning for High Net Worth Families | Michael Conway Story
A financial plan often consists of cash flow projections to determine the likelihood of success for future goals. These projections must make certain assumptions that can hugely affect the outcome. Therefore, unrealistic expectations regarding certain factors could skew the result, meaning clients could face a far different reality than what the math suggests.
We think it’s important to be conservative. Don’t assume that invested assets will grow at 10% every year, for example. In addition, as you suggest, clients and advisors need to remember that years in retirement continue to lengthen. As medicine and technology improve exponentially, retirees will live much longer than ever before, which means assets often need to last for many years after retirement. Therefore, a conservative plan should assume clients live into their 90s and beyond. This often means that planning no longer follows a traditional lifecycle where clients enter full retirement in their mid-60s.
Ultimately, financial plans not only need to align with a particular client, but also with the changing external factors that can affect success.
As you mentioned, some investors have started to use new do-it-yourself investing and planning apps rather than hiring a human. In fact, a recent KPMG study estimates robo assets under management will reach a staggering $2.2 trillion by 2020. While these tools offer a streamlined and intuitive experience for the masses, they lack the most critical component of advice: personal accountability. Clients will likely never feel accountable to a computer screen. Using a faceless app, you won’t feel as guilty about going against the long-term plan. You won’t worry as much about overspending, forgetting to sign your will, or disregarding life insurance. The best advisors harness new technologies while still providing personal, individualized advice.
In reality, the human element has always been our most important differentiator. Our distinguishable worth was never based on our “unique” portfolio strategy. Even the best analysis can’t always avoid the unpredictability of poor performance. Instead, an advisor’s ability to coach and deter clients from poor decisions represents the biggest differentiator from the robo platforms. A Vanguard study quantified this “advisor alpha” and showed that investors missed out on 3% in returns per year without professional help. Behavioral coaching, or hands-on guidance in all aspects of a client’s financial and personal life, constituted the largest piece of that increase. (For more, see "Coaching Clients Through Financial Planning: How Advisors Add Value By Managing Behavior.")
People tend to address specific issues as they arise rather than looking at the broader picture. Many people know to purchase life insurance, for example, but may not realize how that can affect cash flow for things like paying for college. Your insurance agent may not be aware of this type of nuance. Unfortunately, such a piecemeal approach can result in unintended consequences. Instead, elements of planning like insurance work best in sync with all other parts of the plan. A “comprehensive” financial advisor can oversee all the moving pieces and ensure each fits with a client’s needs and goals.
You’re describing market timing. We’ve all heard the common refrain of buying low and selling high. It’s easy, right? Sadly, like most conventional wisdom, that strategy overlooks important nuance. To win the timing game, investors need to guess both the right time to get in and the right time to get out. But here’s the catch, markets are fickle and ultimately unpredictable. Every data point on the planet may suggest a stock will soon fall, but an irrational market may decide otherwise. Worse, the entire market could move in the opposite direction of sentiment. Remember when people said the market would nosedive if the U.S. elected Trump?
To your point, historical averages suggest we are “due” for a recession. However, the market may very well continue upward. Meanwhile, inflation could continue to erode the purchasing power of the cash you leave in the bank. Ask yourself, how much does the market need to drop before you jump in? Is it 5 percent, 10 percent, 20 percent, more? It’s impossible to determine the exact bottom of the market.
At near-record market highs, someone that can’t emotionally withstand a sudden drop in portfolio value may consider a dollar cost averaging approach to entering the market. The downside to this approach is the opportunity cost of not putting all of your dollars to work. But strategy must depend on risk tolerance, liquidity needs, time horizon, etc. Regardless of how and when investors enter the market, we suggest people build diversified portfolios and maintain a long-term mindset. (For more, see: “Coaching Clients Through Financial Planning: How Advisors Add Value By Managing Behavior”)
The short answer is yes. A lot of the planning industry has essentially written off the idea of working with younger generations like millennials for various reasons. And frankly, that’s partially because the average age of advisors is 51. Many of them have built great businesses over decades, so they’re inclined to maintain the status quo in working with older generations of clients. Meanwhile, the world has changed around them. In the past, it was difficult to amass significant wealth until the later years of a long career of climbing the corporate ladder. Today, younger people are much more entrepreneurial and may sell businesses for millions before hitting their 30th birthday. They also have totally different priorities. They’re not necessarily buying houses early in life, or staying in one job forever, or focusing on trying to retire at some specific age.
As a result, we believe millennials will define what the planning industry looks like in the next 5 to 10 years. Businesses that don’t adapt will struggle to survive. Whether we like it or not, millennial preferences should begin to dictate how we provide financial planning services in the future. In particular, we think planning will look far more personal than ever before because young people seek happiness in life beyond the numbers. Planning can no longer just be about the bottom line, but about how a client’s money ties in with all other aspects of life. (For more, see “Investment Planning for the Millennial Market Disruption.”)
Advisors also face the challenge of healing self-inflicted reputation wounds. Many young people view advisors as the old suits that don’t necessarily have a client’s best interests at heart. Millennials witnessed one of the greatest financial collapses in our history right as they entered the workforce, many with massive student loan debt. Some of them watched parents lose their homes while the government bailed out the big banks. As advisors, we need to start reaching out our hand and projecting a voice in the marketplace that speaks to their needs and values. We need to actually define what we do. We need to be more transparent than ever. We need to offer simplified technology solutions and a better client experience. And we need to act as empathetic educators, which we think builds the kind of trust younger generations demand.