Protection Against The Next Correction: The Mariner Wealth Advisors Formula for Riding Shifting Market Tides
When markets rise, investors are understandably focused on maximizing investment returns. Their advisors, however, should hopefully be at work positioning client portfolios in anticipation of a future market correction, in addition to helping investors participate in gains from a buoyant market period.
Knowing that an advisor is working behind the scenes to anticipate future outcomes and develop strategies tailored to the constantly evolving economic landscape is, arguably, one of the most important reasons to develop and maintain a strong relationship with an investment advisor throughout all stages of the market cycle.
At Mariner Wealth Advisors, we apply a three-pronged approach to helping clients build, manage, and adapt their investment portfolios over time. Much of this work occurs on the back-end, and is geared toward leveraging in-house expertise alongside quantitative analysis and modeling techniques to best position portfolios and mitigate, as much as possible, the uncertainty that can cause anxiety among investors. And in addition to these back-end processes that are unique to Mariner Wealth Advisors, the manner in which they are applied within the framework of our hands-on, consultative approach to each client relationship gives Mariner investors an edge over others facing these same challenges and uncertainties.
Building the Relationship
An advisor’s ability to address future market volatility is only as valuable as his or her understanding of a client’s needs, priorities and risk tolerance. Strategies for protecting a portfolio against a future correction must be applied in the context of each client’s unique preferences and objectives. The key to this, of course, is building a strong foundation of trust and communication between the client and advisor. Taking the time to build and nurture a solid relationship with the client is a critical piece of the equation that, unfortunately, many other advisors neglect. At Mariner, our advisors work tirelessly to get to know their clients, so that we can proactively (and reactively, when the situation calls for it) make decisions that are in each client’s best interests. Mariner clients can also rest easier knowing that their advisors have a deep and personalized understanding of their unique financial picture, and can make the best decisions during times both turbulent and calm.
Behind the Scenes: the “Art & Science” of Mariner Investment Management
Even during the most uneventful of market periods, Mariner works tirelessly to deploy its expertise and investment analytics tools to monitor, evaluate, and improve investments across client portfolios. The team in charge of this essential effort is the Mariner Investment Committee: a carefully-selected group of tenured investment professionals from across the firm that are jointly responsible for investment management research, performance evaluation, capital markets assumptions, manager analysis and due diligence. The Investment Committee makes use of three key strategies to help ensure that client portfolios are optimally structured to capitalize on strong markets and weather market corrections.
The first strategy is strategic asset allocation. In addition to directing the types of investments that are made and how those investments are allocated within a portfolio, this also entails the application of internally developed capital market assumptions and a complex analytical process for determining relative expected returns. The goal of strategic asset allocation is to optimize portfolios to participate in up markets while minimizing potential drawdowns during down markets. The Investment Committee will also seek to reduce correlation among asset classes within our portfolios by incorporating investments that are either true diversifiers or volatility dampeners. For example, while high-quality fixed income still plays a role in a well-diversified portfolio, we will typically include alternative asset classes that have the potential to both provide income and downside protection.
Manager selection is the next key strategy put to work by the Mariner Investment Committee and is intended to serve as a second round of downside protection for our portfolios. Working within the strategic asset allocation framework, we apply a further layer of protection by identifying managers with both strong downside capture ratios and a history of strong upside participation. A manager’s inclusion in a portfolio is, of course, contingent upon meeting our rigorous standards for managers and corresponding investments, after having completed an in-depth due diligence process. This process, while arduous, is an important part of the Investment Committee’s ability to effectively identify specific diversifiers and determine when it makes sense to apply passive strategies in order to gain access to low-cost market exposure. Needless to say, the Investment Committee is constantly evaluating our portfolios and manager selections to ensure that they continue to meet our clients’ needs and are as cost-effective as possible.
The third key strategy relates to making tactical, timely, and data-driven decisions, as web believe this is one of the most important roles fulfilled by the Investment Committee. Mariner is focused, first and foremost, on long-term performance, and we are firmly committed to a strategic investment approach that avoids market timing whenever possible. Consequently, our portfolios are guided by pre-established strategic asset allocation targets. We do, however, retain the agility to employ tactical moves when we believe there are either short-term opportunities (typically six to nine months) to be captured, or increased risk that can be avoided. Part of this process entails leveraging the firm’s “economic scorecard”: a constantly-evolving framework that considers multiple economic and market metrics across specific points in the market cycle, designed to provide guidance on what types of adjustments to make and under what specific conditions.
Bringing it Together: Communication & Trust
When we unite the time and effort spent to build client relationships with everything that goes into our investment process on the back-end, we achieve the third and final prong of our approach to helping clients succeed. Our commitment to understanding each client’s needs combined with the expertise of our investment team and the process applied to each and every decision made is what truly sets Mariner Wealth Advisors apart from other firms.
The key, of course, is to bring these things together through communication and trust, and that starts with the relationship between our clients and our advisors. Mariner advisors are limited to a small number of clients and have the full spectrum of Mariner’s national resources at their disposal to better serve and advise each and every one. Not only does this mean our advisors can devote more attention to understanding a client’s needs and adapting their investment plan accordingly, but it also gives advisors the ability to be proactive in communicating with clients during all types of market activity. Our advisors are also charged with serving as advocates for their clients when it comes to investment strategy and broader firm decisions – a true testament to Mariner’s unwavering “client first” philosophy.
This commentary is limited to the dissemination of general information pertaining to Mariner Wealth Advisor’s investment advisory services and general economic market conditions. The information contained herein is not intended to be personal legal, investment or tax advice or a solicitation to buy or sell any security or engage in a particular investment strategy. Nothing herein should be relied upon as such. The views expressed are for commentary purposes only and do not take into account any individual personal, financial, or tax considerations. There is no guarantee that any claims made will come to pass. The opinions and forecasts are based on information and sources of information deemed to be reliable, but Mariner Wealth Advisors does not warrant the accuracy of the information that this opinion and forecast is based upon.
Mariner Wealth Advisors (“MWA”) is an SEC registered investment adviser with its principal place of business in the State of Kansas. Registration of an investment adviser does not imply any level of skill or training. MWA and its representatives are in compliance with the current registration and notice filing requirements imposed upon registered investment advisers by those states in which MWA maintains clients. MWA may only transact business in those states in which it is notice filed, or qualifies for an exemption or exclusion from notice filing requirements. Any subsequent, direct communication by MWA with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For additional information about MWA, including fees and services, please contact MWA or refer to the Investment Adviser Public Disclosure website. Please read the disclosure statement carefully before you invest or send money.