Planning For Life’s Uncertainties
by Martin Miron
Financial advisor Seth Mitchell, of the The Mitchell Wealth Management Group at UBS Financial Services, grew up in the West Greenwich Village, in New York City. He graduated from the School of Business and Public Administration (now the Leonard Stern School of Business) at NYU in corporate banking and finance and international business. Starting at Prudential Securities in 1989 in the New York taxable fixed income division, he moved to their retail division in 1992.
“I came over to UBS Financial Services, which is the largest wealth manager in the world, because after 18 years at Prudential Securities, I felt that this would be the best place to be able to have the infrastructure and the depth and the scope of intellectual capital to continue to service my clients,” explains Mitchell. “It’s a virtual team.”
His clients—institutional, corporate and individual—have a diversity of needs, including asset management, estate, trust and retirement planning strategies, investments for growth, dividend income and tax-exempt status. “I think that women are not going to be as traditional as their roles used to be over the years. Obviously, there’s a wage gap between men and women, but they’re rising to that occasion, narrowing that gap,” says Mitchell. “They’re choosing to get married later in life or perhaps not get married at all, in which case they have to be proactive in seeking advice and well-versed in the world of finance and investment.”
Although events of the day can send the stock market on a seemingly erratic course, Mitchell says, “The worst thing that anybody can do is really listen to all the noise, and in this day and age, the noise is 24/7 between all the news cycles. The news is very repetitive and the old cliché is, ‘Don’t drink too much to celebrate when things are going in the right direction and don’t drink too much to dull the senses when things are going in the wrong direction.’ This is about planning. It’s not about the short-term investment.”
Keeping people’s spending and borrowing and budgeting really in check is part of the planning process. “Investment strategy planning starts with a comfortable, calm discussion, trying to take emotion out of things, but trying to be honest with one’s self as far as what does one really want, what does one really need. And the actual investment comes dead last. What we do here is we’re kind of like financial doctors. We do the CAT scans, the MRIs, the bloodwork. We do all the due diligence. We analyze and crunch all the data, and there are different specialists and experts that are part of this process. It’s certainly not just myself.”
He counsels, “We never give any tax advice. We never give any legal advice, but we do work very closely with clients’ other fiduciaries and their advisers, specifically the estate planning attorneys and the CPAs. We are that team for the client.”
Mitchell advises that the key to maintaining a sound portfolio is diversification. “That’s an old-fashioned term, and a lot of people lose sight of that when people either get greedy or overly frightened or just forget that they really are in it for the long haul. You’re always going to have cyclical recessions every several years, and you’re always going to have down markets. It’s not a straight line; it can go lower before it goes higher. If you’re in a hurry, you’re going to be taking on more risk.”
He notes that diversification is very different today than in the past. “Years ago, you used to have three main asset classes: you had cash, you had bonds and you had stocks. Today, you have cash, bonds, stocks, and within those asset classes particularly stocks and bonds, you have different types. Other asset classes may also include but are not limited to global, international, emerging markets, alternatives and real estate.”
Mitchell recommends that investors adopt a mantra of “liquidity, longevity and legacy”. He clarifies, “Liquidity is for your needs now or the next six to 24 months or longer. Liquid means having the money at your disposal now or let’s say within 24 hours or 48 hours. Or, if one should lose a job or have an immediate need, that they can pay their bills, pay their expenses, pay their rent, take care of a loved one or address an emergency situation where they don’t have to think about raising cash, whether it be taking out a loan, selling their investments or god forbid, having to sell a home or a house. So that’s the liquidity bucket, and that is made up of different short-term, cash-type equivalents or something that can be turned into cash very quickly.”
He explains that the next bucket is longevity. “People are living longer now than they were a couple decades ago, so time can be your friend or it can be your enemy. Longevity is just that; it’s for the long game. You can’t rush the passage of time, and that can actually be a wonderful thing if one has the right attitude, because if somebody is systematically saving in their 20s and 30s and 40s, when they’re in their 60s, 70s and 80s and they have a lifetime to reflect back on, then they are going to have quite a longevity bucket to be able to protect, and that leads us into the legacy bucket.”
Mitchell thinks the best legacy planning is done when somebody is vibrant, healthy and alive. “What does their legacy mean? It means whomever, whether it be family, friends, institutions, charities, wherever they are going to be leaving their wealth. The process and the implementation of a plan is something that is malleable; it’s living and breathing because life changes and situations and circumstances change.”
UBS Financial Services Mitchell Wealth Management Group is located at 1251 Ave. of the Americas, 2nd Fl., New York, NY. For more information, call 212-626-8588, email [email protected] or visit UBS.com/team/mitchellwmg.