HCR Wealth Advisors — The Client Comes First

Updated: June 4, 2019

Global investment and advisory firm HCR Wealth Advisors recently issued its take on recent economic numbers and the course that it sees the Federal Reserve and other central banks taking over the next few quarters.

We largely concur with HCR’s outlook that continued Federal Reserve slackening of broad monetary policy, through both open-market operations and cessation of rate hikes, will combine with currently underinvested hedge funds and other institutional investors to put strong upward pressure on equities over the next couple of quarters.

HCR believes that the Fed’s demonstration of flexible responsiveness to negative market signals regarding its schedule of continued rate hikes and balance sheet reductions sent a powerful message to the markets. And this is the primary cause behind the enormous rally that has been experienced throughout the first quarter of 2019, with major U.S. indexes now trading near record highs. This comes after the most serious market downturn since the financial crisis of 2008, with the Dow Jones losing nearly 10 percent of its value in December of 2018.

The Fed had previously rattled its saber quite vigorously regarding its so-called quantitative tightening programs as well as its rate-hike schedule, stating unambiguously that it would continue hiking rates throughout 2019 while also allowing the majority of the bonds on its balance sheet to expire without renewal.

But the central bank made a stunning reversal following the market debacle of December. After its January meeting, the Fed put future rate hikes on indefinite hold while stating that it will continue cautiously unwinding its balance sheet. But the central bank has also reassured investors that, should market turmoil erupt once again, it will keep all options on the table. In particular, it may decide to freeze its balance sheet reduction by replacing maturing bonds.

The Fed has stated that it will keep the federal funds rate at between 2.25 and 2.5 percent for the indefinite future.

It is clear that the Fed’s loosening of monetary policy has been a big driver of the market rally that we’ve seen throughout the first half of 2019. The trickier question is how long the rally can be expected to last.

One factor that will play a key role is to what extent institutional investors are willing to reallocate their portfolios towards equities. HCR Wealth Advisors has stated that, through their research, it is clear that there is still a lot of potential cash sitting on the sidelines. And big-time fund managers will increasingly feel pressured to reallocate those funds towards equities as the market rally continues.

This, says HCR, could easily sustain a significant upswing through the end of the year. But HCR paints this portrait amid a background of the longest economic recovery in history, in which stocks are generally overpriced by almost any historic measure. At the same time, the U.S. is struggling with rapidly spiraling debt, both public and private, and a consumer-driven economy in which consumers themselves are increasingly stretched thin.

When it comes to wealth management, every client is an individual with unique needs. At HCR Wealth Advisors, they strive to tailor their strategy to each and every client and their customer-centered approach has worked well for many years. HCR Wealth Advisors is a wealth advisory firm that has served hundreds of clients throughout the USA and their priority is to build long-lasting relationships with repeat customers. At HCR Wealth Advisors, it’s all about the client.

Putting Clients First

As a registered investment advisory firm, their strategy has always been to put clients first and foremost. The generic and passive approach to wealth management has been left behind in lieu of a more dynamic, collaborative and tailored strategy. HCR Wealth Advisors is client-centric and instead of getting paid to sell financial products, they take an approach that aims to actively collaborate with clients as investment partners. One fee is the uniform charge as a percentage of assets so there are no hidden costs. To foster a working relationship, transparency is crucial, and they are clear about all costs and charges from the beginning of the relationship.

More Than a Money Manager

It is important to understand the difference between a money manager and a wealth advisor. HCR Wealth Advisors are not merely money managers. A money manager manages money by allocating funds within a portfolio, typically lumping investments as a bundle or group. This is not the approach taken by HCR Wealth Advisors, who take the time to get to know every client on a one to one basis. This strategy has enabled HCR Wealth Advisors to maintain an estimated 95% client retention rate. The goal is also to educate clients on investment strategy in order to help clients reach their financial goals.

A Personalized Wealth Management Strategy

Instead of just assessing age and risk in portfolio allocation, though these are factored in, HCR Wealth Advisors takes a more holistic approach to wealth management. The human touch is evident throughout the investment process. Algorithms and automated allocation take a back seat to a customized and personalized wealth management strategy.

The firm takes into account the goals and aspirations of the individual, building future financial objectives based on these goals. These goals and future objectives are reviewed with the client periodically. HCR Wealth Advisors deals with many clients who are transitioning through various stages of their lives, including marriage, divorce, inheritance, sale of property, the start of education, new business ventures and retirement. Any of these major life transitions will have an effect on the goals and financial projections of the client and is factored into the wealth management strategy. The one size fits all approach offered by money managers is simply not flexible enough to cater for the wide variety of unique investors with changing goals and aspirations.

A client is not allocated to one firm representative for the purposes of investment. Each customer typically will have access to a lead advisor, a financial planner, and an analyst. The lead advisor is the primary point of contact, the financial planner focuses on current and future wealth planning strategy and the analyst focuses on research and client investments. This ensures that each client can access a wider base of expertise, and a team approach generally leads to better service and happier customers.

A Full Suite of Financial Services

HCR does not charge an additional fee for helping clients with financial planning. It is an integral part of wealth management and is something that needs to be done regardless, so unlike some wealth management firms, there is no separate charge. HCR Wealth Advisors offers services in four key areas — Finance and wealth management, insurance, business and consulting. More is offered than portfolio investing as the firm provides a full suite of financial services. A private portal enables clients to have full access to information about their portfolio 24/7.

Transparency and Compliance

A company that has been in business for 30 years needs to keep up to date with the latest regulatory policies and guidelines. HCR Wealth Advisors strives to be as transparent as possible with our customers, instead of trying to simply fulfill regulatory requirements to satisfy the firm’s compliance responsibilities like many other companies. HCR Wealth Advisors is registered and regulated by the Securities and Exchange Commission as an investment advisory firm and the HCR team is composed of certified financial planners, chartered financial analysts, licensed securities brokers and licensed real estate agents.

Ultimately, the process of trying to make a profit off of customers instead of making profits with customers is ruining the financial services model. With a client-centered approach that actively collaborates with customers and takes their needs and interests into account, both clients and wealth management firms can work together using a sound, carefully planned and regularly reviewed investment strategy. HCR Wealth Advisors has been providing financial advice to investors from all walks of life for 30 years. Developing long-lasting and healthy relationships with people is at the heart of our wealth management enterprise.

*This article is for informational purposes only and should not be considered investment advice.