High-Touch Retirement Planning in a High-Tech World Video from Savant Wealth Management

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Hello, everyone. Welcome to today’s Savant live webinar. Thank you for joining us all. Today, we are gonna be discussing high-touch financial planning in a high-tech world, which in some ways is becoming more and more of a hot topic discussion, you know, regarding, you know, AI and the use of tech and financial services. So, we’re looking forward to having that conversation with you guys.

My name is Jeff Lewis. I’m a financial adviser in our Rockford, Illinois office. And today, I’m joined by a fellow adviser, Cory Barel with me. Hello, Cory.

Hello. Hello. Thanks, Jeff. Yeah. Great to be with you today, from our Boston office, and I’m really looking forward to this topic on some of the recent technological changes we’ve seen in the industry.

New technologies often come with big promises, fast adoption, and a lot of uncertainty, and headlines can move faster than the facts. What this results in is it makes it hard for investors to really tell the difference between what are the real long-term opportunities in front of them and what is the short term hype on the on the recent news. So as financial advisers, our role here is really to bring clarity and discipline to these conversations with people we work with.

And looking at these new tools through evidence, historical perspective, and really solid planning principles rather than emotion and buying into that hype. So, today’s session is really all about providing that context so decisions are guided by facts, not noise.

I’m gonna hand it over to Jeff you, Jeff here in just a second. But one note I’ll make quickly for all the attendees, please use the Q&A link, the box at the bottom of your screen, for any questions that come up throughout the course of the conversation, and we’ll get to the ones we can at the end.

Perfect. Well, thanks, Cory. So, yeah, so today, we kind of got a full packed agenda that we’ll be focusing on, more so kind of starting off just with kind of tech revolution in financial planning. We’re gonna break that down into two different segments. One being more focused on artificial intelligence, but then also kind of the rise of cryptocurrency and what that has done for investments. And then, obviously, we’ll hit on a couple other discussion points as we get through it. But let’s go ahead and jump into the first portion of this presentation, and then we’ll kind of go from there.

So I think at a at a really high level, right, more so in the last probably ten to twenty years than ever and then even so in the last two to three years as it relates to AI, you know, technology has continued to change, I think, how we live our day-to-day lives. You know, obviously, it seems like everybody has a smartphone these days where we have more and quicker access to more information than we ever have before.

And so how that eventually is going to change, how we do our jobs, how we deliver, you know, outcomes to individuals, like, that’s all going to change moving forward. But then as you’ll see as part of this presentation today, there’s still gonna be some timeless principles as part of that.

And so kind of moving into the next slide, you know, thinking about artificial intelligence as well as automation in in two different lenses and how that’s really reshaping financial planning and kinda what we’re doing day to day.

And I think one of the biggest benefits that, you know, people will see who do work with financial advisers is they’re gonna start seeing a lot more personalized advice, at scale. Right? So, we’re gonna be able to work with individuals, work with more families because the use of automation of tasks and more repetitive work is now being automated through the use of AI. And so, it’s going to allow advisers to spend more time on higher value activities with their clients that, really mean more to the relationship and bring more value into the, you know, the situation that they’re working with individuals.

And so, I think that’ll be a big shift as kinda we see AI and the use of this going forward. More advisers who are using AI, you’re gonna notice the difference. You’re gonna have more prepared, more well thought through meetings. The follow through and the follow-up’s going to be a little bit better.

It’s gonna be more you know, some of that’s gonna be more automated. And then it’s really gonna allow you to have more deeper, higher touch point value conversations with your adviser, because things like, you know, portfolio management, trading, a lot of that is gonna end up being automated through the use of AI and technology. And so it’s gonna allow your adviser to really, you know, better understand, like, what’s most important to you. What are you trying to accomplish?

The goals, the priorities that you have for yourself, your partner, your spouse, your family. I think that’s where this is trending towards kinda going forward.

You know, you can probably see where I’m going with this. You know, you see hybrid models as a bullet point on the right side of your screen when you’re talking about automation.

I think we’re gonna be living in a world where combining AI and technology with human touch points and human expertise, that’s ultimately where all of this is driving towards. Right? So, if you’re only using AI or only using technology, but you’re missing the human component of this, you’re probably missing the ball. And if you’re only working with a human and you’re not utilizing technology, you’re also not producing the best outcomes for the clients. So, you really have to think about that in terms of how technology is changing things and what that’s gonna look like going forward.

As far as kind of technology being a tool, right, you know, the thing that you always hear in the news, is how AI is going to replace jobs and replace people.

And I think the unique thing about our industry and our jobs specifically in financial planning, I would argue the biggest aspect of it is dealing with people. Right? And what I am still seeing today is people wanna work with people, and they wanna use technology as a tool to produce better outcomes, but they don’t want to fully rely upon the tool. Right?

Because there’s some unique considerations and risks to that. So, as I mentioned earlier, you know, AI is really gonna play the role of being able to automate more redundant, repetitive tasks. Right? So, it’s gonna be able to do some automated trading within the portfolio.

You’re gonna be able to kinda set parameters and, you know, be able to make, you know, kinda automatic trades as part of that. You know, I still think having a human kinda overseeing that process and making sure that things are still according to flow, that’s still gonna be an integral part of the process, but a large portion of that will be automated going forward.

And as I mentioned, you know, as I was talking about freeing up the advisor’s capacity to really work and better understand what’s most important to clients. I think when I first began as an adviser over ten years ago, you know, you’re shifting through reports. You’re going through a lot of data. You’re talking about performance withdrawals. You know, a lot of that is gonna be summarized in summary reports going forward, and you’re gonna share it with the client and say, here. Here’s your summary on the portfolio.

But most of the conversation is going to be centered around what you know, where are you trying to go? What are you trying to do? What’s most important to you? What are you trying to accomplish?

And I would even argue that the best advisers are the at least the really good ones. They’ve already been doing this for the better part of the last five to ten years. Right? They’ve already incorporated this into their process with their clients where they’re having a deeper relationship that’s more based around the values and the priorities and the goals that people have.

Because at the end of the day, what’s happening is technology and AI is commoditizing a lot of different industries, right, where you can go and you know, a lot of people are saying they’re doing a lot of things related to financial planning or investment management. You know, there’s a lot of people saying that they’re doing it, but who’s actually delivering on it is a separate topic. And so, I think the combination of having a human supported by the use of technology and AI, that’s ultimately where all of this is eventually going. I have a hard time believing that, you know, people aren’t going to want to work with people.

You know, that’s kind of what our society and our entire fabrication is built on.

And so, it’s hard to envision a world where we just say, hey. You know what? People aren’t gonna interact anymore. Right? We’re just gonna rely upon a search engine or a search opt search optimization tool to live my life, and I’m not gonna ask or talk to anybody else about it.

Highly unrealistic, probably highly unlikely. And so, I think the future is really gonna be, you know, humans using AI to produce better outcomes for themselves.

So, this is this you know, everybody talks about, like, the goods, the pros, you know, all the benefits that come with AI. And, really, the only thing I ever hear bad about AI is like, oh, it’s gonna replace jobs. Right? And, you know, that’s kind of a separate discussion. We won’t touch too much on that today.

But when I think about risks with AI in financial planning, the one that comes to my mind off the top of my head, it’s the first bullet point that we have on here. It’s confirmation bias.

We are all subject to our own beliefs of how we view things, and our beliefs can sometimes get in the way of making either objective or informed decisions based on, you know, the situation that’s presented in front of us.

And, Corey, I know you’re gonna touch on, you know, how do you prompt AI and prompt it with the right questions.

But at a really high level, AI, the way it is today, will tell you whatever you want to tell whatever you prompt it with, it will give you back what you’re looking for. Right? So, if you prompt it with a specific question that says, you know you know, let’s use the four percent withdrawal rate rule. Right? So, let’s say, what’s a you know, given the four percent withdrawal rate rule on my investment portfolio, how much should I take out of my, you know, investment portfolio? It’s gonna come back with a very broad general answer. Right?

But I think what we have found in financial planning is people aren’t living by the four percent rule anymore. That’s kinda like a old idea that was developed, you know, thirty years ago. And while it’s a good rule of thumb, it’s not personalized advice. And so, Cory, I’d be interested to hear your thoughts on some of this kind of what you’re seeing and how there are risks with using AI if you’re not fully aware of both the pros and the cons.

Yeah. Yeah. I liked what you first talked about there. I mean, confirmation bias is something that we hear about a lot with artificial intelligence and using it.

And if you really kind of go down to the roots of what these companies are and what they want, the AI companies want people to enjoy using and engaging with their software. So, they want positive responses and people to get the responses also that they’re looking for, which, you know, is a good thing. It’s the chatbots. It creates a good user The negative that comes with that is sometimes the answers that come back to you mirror whatever opinions or bias you have in your prompt and create a sort of echo chamber where you’re getting back the answer that you’re looking for, which, you know, in in the context of a chatbot, sometimes helpful.

In the context of using it for financial planning, you don’t want an echo chamber. You want an evidence-based approach coming back to you. So, I think that’s one thing to be careful of, and that’s one thing. If you’re using AI and prompting it, really try to avoid having, one, any bias in your prompts, and you can even ask it to give me several different opinions, with different approaches.

So, I think that’s a really important one there.

Rules of thumb, and this is another one. Before it was AI, it was Google searches where people would find vast overgeneralizations as answers to questions. The most common example I’d say is you take two sixty, sixty-five-year-old couples who are retiring, and they type in Google or type in their AI chatbot. Hey. I’m looking to approach retirement. You know, what should my investment mix be during retirement?

And a lot of what you’re gonna find online and the first response you’re gonna get from AI is, you know, the most common retirement investment mix is sixty percent in stocks, forty percent in bonds, which is not wrong. The difference is these two couples could have completely different needs for that money. Let’s say one of them may have a pension, and that plus Social Security fully covers their living expenses, and their goal for the money is really to maximize growth for the next generation, kids, grandkids.

Then the other couple is retired and gonna be currently drawing or consistently drawing monthly from their investments. Those are two vastly different situations that warrant personalized answer.

And AI used incorrectly can give them the same response even though, again, they require those personalized strategies.

And then the last bullet here, data quality issues.

AI is only as good as the underlying data. If you look at it, AI is one large sorting machine that pulls on a ridiculous amount of information. So whatever information it’s pulling on, you need it to have the right resources and sources to do that.

I’m gonna give a good example here and a callback to this a little bit later as we talk about cryptocurrency, but I would you know, one of the most common things to say is don’t take the output you’re getting from AI at face value. So same thing is the old saying, don’t trust everything you see on the Internet. A lot of the information that’s used by these AI these AI agents come from the Internet. So, you, again, don’t wanna take it at false value or face value and confirm that information.

The last thing I’d say here is, I think Jeff touched on it really well, but AI is a good way to look at it is it’s one of the arrows in the quiver.

It’s very helpful. It’s going to improve efficiency. It’s gonna allow your adviser to really get more into the meat of where they can really help you and offload a lot of those basic tasks.

But it’s not a full replacement for a personalized human driven financial plan.

It’s not today, and I have a hard time seeing it ever really make that transition.

We’re gonna switch gears here a little bit and switch over to cryptocurrency, our digital assets. Again, when we’re talking about technological changes going on in the industry, AI is the hot topic of today. Cryptocurrency has kind of been the hot topic of the last three to five years. So, we wanted to at least at least touch on it.

Boiling down, what are digital assets? Cryptocurrency and digital assets are a form of digital money that’s not controlled by any singular bank or government, aka that fancy term you see on the screen and you hear about a lot in the news, decentralized. That’s what that means is that it’s not controlled by any single entity.

Major categories of cryptocurrency, the most popular is gonna be coins or tokens. I’m sure by this point, everyone has heard of Bitcoin. That’s by far the largest and most popular one. They’re also stable coins, which, you know, tie a cryptocurrency to another existing currency for more stability. And then you may also remember that NFT or non-fungible token craze that was in early COVID, where you’re trading or buying unique digital rights online, so pictures or other digital content.

So, there is a couple different there. That’s three of them. There are dozens of different categories for digital assets. Those are the primary ones. And really, it’s the coins that a lot of people are interested in from an investment perspective.

Growth drivers for crypto, this is where it gets a little bit interesting.

Cryptocurrency doesn’t act like your more traditional investments. There’s no underlying assets, and it’s not kicking off any underlying income. It’s really a pure supply and demand play.

People who invest in cryptocurrency are essentially voting with their checkbooks that they think it’s going to become more widely adopted. So, again, there’s nothing really underlying it. It’s just voting that it’s just making a vote with your checkbook that you think more people are gonna use it. Therefore, there will be more demand. Therefore, the price then goes up. So a nontraditional asset.

Institutional adoption, this has been a bigger theme in the last two years here, I would say. But a lot of the larger banks and financial institutions are adopting cryptocurrency, given the demand and popularity we see out there.

This is a overall, add some legitimacy to a historically very speculative asset class. Having these large well-known Wall Street banks or other financial institutions create their own cryptocurrency funds has generally been seen as a positive thing for the market.

There’s a slight negative aspect to it too, which I’ll touch on here in the next slide.

One of the best ways I found to start the conversation or surrounding cryptocurrency with people that we work with has been to look at it relative to the stock market and other more traditional assets.

You see here the total market capitalization, meaning total dollars invested in the crypto market as a whole, is roughly three trillion dollars.

Of that, about two thirds is Bitcoin. That that’s that one point five to two trillion you see right there. Another ten to fifteen percent is in Ethereum, which is the second most popular cryptocurrency that’s widely available and talked about. And the rest is spread across tens of thousands of various cryptocurrencies or other digital assets.

I mentioned a callback to that the AI data information. And ahead of this meeting, I I asked AI, how many different cryptocurrencies are currently out there in the in the market? And the answer it gave back to me was the number of available digital assets out there is between nineteen thousand and twenty-nine million, depending on what source you’re using.

That’s pretty widespread and shows you that sometimes the information you get back, you know, is not as detailed as you may want it to be, and you have to dive deeper to really get the answer you’re looking for.

Again, when we’re looking at these overall market sizes, three trillion is a big number, but putting that relative to a single stock in Apple at over four trillion and the global stock market at over a hundred and twenty six trillion shows that it’s only about two percent the size of the more traditional stock market.

If you wanna be an investor in cryptocurrency, you know, you don’t wanna make it an oversized position in your investments.

Common guidance is five to a max of about ten percent of your overall investments, but a smaller percentage may very well be appropriate for you if you wanna participate without vastly changing the volatility in your investments. So, again, you know, put the total crypto market relative to that hundred and twenty-seven trillion that’s in the stock market that’s a little over two percent. You could also try to mirror that and see a lot less change in the movement in your overall investments.

Really, kind of wrapping up the cryptocurrency side, things to think about here. And I think the big one is pros and cons as a component in in your investment portfolio. How does crypto really act if you were to invest in it?

I think the biggest opportunity that comes with owning cryptocurrency is diversification. As I mentioned earlier, it’s not a real traditional asset class. Its value changes differently.

It does not move in step with the stock market. It’s not correlated.

Although, as it has emerged more as an investment, it’s become a little bit more correlated over the years.

But having that diversification offers the potential for positive returns when the stock market is going through a downturn and can be really effective that way.

I think the two biggest risks facing cryptocurrency are really volatility as the starter. So, crypto remains one of the most volatile asset classes out there, and that that kind of goes back to the point I made where the value of cryptocurrency is really based on the sentiment around it, around people adopting it rather than any underlying assets. And so, because it’s based on, you know, not something you can really measure on paper, that that makes it a very volatile asset. It allows for large movements one way or the other.

You know, we kind of see that just in the last six months here. In the last three months, crypto has fallen about twenty five percent. The three months before that, it was up twenty-five to thirty percent. And overall, of all of last year, which was a great year in the stock market, the crypto market was essentially flat. And so, you kind of see that that, one, there’s a lot of movement there, and two, that it’s also not directly moving with the stock market.

The most important question, of course, is how does that fit within your overall investment mix and risk tolerance? And the difficult answer here is that the it’s highly personal. It really depends how comfortable you are with those significant fluctuations. Said there are some benefits to having that diversification, but, really, it’s something you should discuss with your adviser in really personalized detail if you’re interested there.

The point of personal risk and that tolerance and the emotions tied to it, I think, is is very important and ties nicely into our next topic here. We’re talking about investment investor behavior. But before I jump to that, anything you’d wanna add here, Jeff?

No. I think I think you did a really good job of just kind of providing a high-level summary of what crypto is. I mean, you know, is it a bubble? Is it real?

I mean, only time will tell. Right? You know, there’s gonna be winners and losers from this just like there have been in a lot of different, previous times in the history of investing. I think the important thing is, you know, emphasizing like, hey.

You know? Yeah. Owning crypto is not necessarily a bad thing, but to have all of your eggs in one basket, yeah, that that’s maybe not advisable. Right?

And I would say that about any sort of investment asset class. You should never have all of your eggs in one basket or one company. So, no, I think you did a really good job of kind of highlighting that. I’m curious to see kind of the thoughts you have on investment behavior because or investor specific behavior because that’s a big part of how AI and tech is kind of revolutionizing what’s coming forward.

So, I’m interested to hear your thoughts on that.

Yep. Yep.

So, on investor behavior, I’ll start by kind of saying this is probably the first topic that that Jeff and I discussed with most new clients that we meet with.

And it’s, I would say, the least technical part of financial planning. It’s not numbers based, but it’s actually usually gonna be the most important. And one of my favorite quotes here or ways to look at it is markets behave rationally over long periods of time. Investors rarely do. And that’s something you see, see with the people that we work with. We see it on a daily basis. And so, when approaching investing in the emotions around it, one of the ways that you can add a lot of value is by getting some coaching on how to think about things.

So, with market timing, some of the most costly mistakes that investors make is not necessarily the investments they buy, but rather the timing where they when they’re buying and selling in and out of them. And there are countless studies that show that the average investor experiences at significantly lower return than the actual underlying investments they own because of that timing in and out. So market timing is shown time and time again to not be an effective way of managing your investments because the you know, you’ll see it here on this next slide where we’re gonna look at the kind of roller coaster of emotions, but your emotions betray you a little bit when it comes to investing.

Investing cash, I think Jeff would attest here. This is the single most common topic in every single meeting that we have. Cash and bank balances is always a recurring discussion. And the reason behind it is there’s a lot of comfort to holding cash, knowing you have assets that you can access that aren’t gonna move whatsoever.

The drawback here is that holding on too much cash is gonna quietly erode your returns over time. Meaning, you’re gonna lose purchasing power to inflation.

One of the simplest ways to show this is a hundred-dollar bill tucked under your mattress for twenty years is gonna lose about half its value. The same can be said for money in in checking or bank accounts that are earning low rates of interest. They’re actually losing value pretty much on a daily basis even though they provide that feeling of security.

And with investing cash, I mean, this can be really hard to do in a vacuum. It’s really hard to make that decision of when to invest it. It also a little bit goes back to market timing. The most common argument we get to talking about investing cash is, well, but is now the right time?

Again, market timing is near impossible. And so that question is the answer, if you’re a long-term investor, is no. It’s not the right time. Timing is not gonna make an impact if we’re looking at it over the next ten, twenty, thirty years of your life.

So, I think that’s a really important one.

Fund picking, the last one here, I’m gonna approach this from two separate perspectives. One is for actively managed investment funds. So, if you own actively managed funds, what you’re doing is you pick one of those funds. There are thousands out there, and you say, I think that this manager on Wall Street can beat whatever benchmark they’re comparing to.

The data shows that that doesn’t work whatsoever in the long run. Only about one in five actively managed funds is going to outperform whatever their target is for a given year.

That one in five doesn’t generally do it again the next year. It’s a different one. So, over the long run, you’re gonna actually trail behind what you would have done if you just own the index that they were comparing to. So that’s one. The other is on the index fund side, even if you do own index funds, fund picking can mean chasing returns for what recently did well. I think a great example of this is really this last year in twenty-five.

If you owned international companies, you noticed you got significant double digit returns that that, you know, did very well relative to US companies.

The flip side is that the previous five to ten years before that, the US outperformed almost every single year. So, anybody who made the decision of saying, you know, the US has been doing so well, I’m gonna put more of my money into it and move it away from international, actually made a mistake. Trying to time and follow trends on what has done well doesn’t necessarily mean that it’s gonna continue doing well in that way. I think that’s another really important one. So, all three of these combined together are really more on behavioral coaching. We’re not talking about what specific investments to choose. It’s more the decisions you make with the investments you have that can make a really significant impact over a long period of time.

I mentioned this roller coaster when we were chatting on the last slide, and this is one of my favorites to talk about. You’ll notice there’s kind of an inverse relationship between the risk financially and where your emotions are. So, if we start on the left there, as the market goes up, investors experience the emotions that are shown there. Optimism, excitement, thrill, and then you’re kind of euphoric at the peak there.

As it goes down, you’ll notice that that the emotions also change significantly. Anxiety, denial, fear, desperation, all the way down to despondency at the end. And so, what what’s really interesting is the maximum risk is when you’re kind of at the peak emotionally, and the and the maximum opportunity is when you’re in that trough. And that imbalance, that emotional imbalance there is what really leads to a lot of poor decisions. And with behavior and what Jeff and I do working with clients is we try to reduce those bad decisions. Really mitigating those will have a big long-term impact.

Yeah, Cory. And I’ll just add, on that slide. Its investing is very counterintuitive. When it feels great and, you know, you’re like, oh, everything’s looking good.

There’s no way the market’s gonna go down. That is the point of maximum risk. Like, you’re at that point. You don’t feel it emotionally or behaviorally because everything that you’re reading or hearing about is like, oh, yeah.

The markets, the economy, it’s doing really, really well. That’s the point of, you know, where you have maximum risk. Now does that mean that you should get out of the market or sell all of your investments and go to cash? No.

It doesn’t. But it just it’s a point, it’s a data point to reference and to be thinking about as you’re going through, you know, over the course of the year or what it may be. And then, ultimately, the hardest thing for us to do as investors, right, is when, you know, you’re at that point of maximum financial opportunity, but you’re staring your investment account balances in the face. You know, like, well, yesterday or six months ago, I had, you know, a million dollars, and now I only have six hundred thousand.

And that all happened in six months, and it’s hard to emotionally get yourself to the point where you’re like, this is the opportunity where I can actually have a very positive impact going, you know, longer term. And so, I always say investing’s counterintuitive. That’s the hardest part about it. That’s where I think AI can’t insert itself into, like, the human brain, at least it can’t yet, because there is so much emotion that comes with those decisions.

And quite honestly, there’s a lot of judgment. You know? There’s not a perfect answer on some of this. And so you have to use your human judgment to help support the decision that you’re making when you’re thinking about all of these things. So I just wanted to mention that there, Cory, because this comes up all the time throughout, you know, years, months, whatever it may be.

Yep. No. I think that’s a great point, Jeff.

I think it, yeah, ties into this the second bullet here on this slide. I mean, we’re talking about how to avoid making bad decisions. One of the things that leads to those bad decisions is those same emotions we looked at on that that roller coaster on that last slide.

It kind of an interesting fact here. Studies show and I don’t know exactly how they test it, but I believe it because Jeff and I see it every day. Losses hurt roughly two times as much in your investments as gains feel good. There’s a kind of a double relationship to downturns relative to really grow really big growth markets. And that, again, letting those emotions rule and help make those decisions for you is what’s gonna lead to those bad decisions.

That trough there at the bottom, the point of maximum financial opportunity, that’s often when most people are scared to either move more money into the market or stay the course and not sell their assets. And so, really, having someone to coach you through that, it makes a monumental difference. A sounding board to help you make your decisions can be make or break.

Again, I think the big thing here, investors making bad decisions is the single largest drag on investments and long-term returns. There’s an old saying that’s time in the market beats timing in the market, ties back into that that first decision making we talked about on the first slide of this area. And I think that we see it time and time again. Making decisions and trying to time the market is never going to have good outcomes if you do it consistently over a long period of time. You may get lucky every now and then, but the chances that you know something that the rest of the market doesn’t is very small.

In terms of the twenty-four-hour news cycle, I think Jeff’s gonna talk about this a little bit later in another area, but I wanna at least touch on it. We do live in a twenty-four-hour news cycle these days. Whether it’s on your phone, computer, the TV, all of it, you know, notifications are constantly popping up on your phone. You know, we see a lot of news, and it’s a little bit ties back into those AI companies.

Those news companies are out there to generate clicks. They want you to engage with whatever content they’re putting out. And the way they do that is by tying whatever their headline is to that same emotional roller coaster. They wanna use the emotion shown on that to get people to engage.

So that’s something we caution against. You know? Split second reactions are generally not gonna be a good decision. And the way to overall avoid this is to really build out that personalized financial plan.

I think having a plan where and, again, this sounds complicated, but we do it with clients is if you factor in every dollar, you know, coming in or going out of the pocket from your pocket from today until the day you pass away, and you’ve comprehensively planned that and seen what that looks like, that can give you a lot of confidence to weather those short term storms. And so I think having that plan, that sounding board, and a team you work with can make a monumental difference in doing exactly what we’re showing here and avoiding those bad decisions.

Anything you wanna add here, Jeff?

No. No, Cory. No. I think this segues nicely into our next, you know, section talking about maintaining long term perspective on things. Right? Because Yeah.

The hardest thing in investing or one of the harder things is to look out further than just kind of, like, day to day. Right? That that’s very hard to do, especially, you know, based on the circumstance an individual may find themself in. Yeah.

And so when I think about yes. Perfect. On this slide, you know, ultimately, you know, when people think about investing, what they’re trying to do is they’re trying to continue to maintain the lifestyle that they’ve grown accustomed to. They don’t wanna lose purchasing power relative to inflation.

They’re trying to maintain their lifestyle that they had when they were working, you know, thinking about somebody who’s retired now.

And so the best way to maintain your purchasing power or, you know, in lack of better terms, beat inflation is you have to take risk. Right? And that doesn’t mean you have to take uncalculated risk or more risk than what’s appropriate for what you’re comfortable with.

But generally speaking, you’re gonna end up owning kind of a mixture of both stocks and bonds that over the course of a twenty to thirty year retirement time horizon is going to provide you not only income, you know, day to day or month to month, but it’s going to continue growing at a rate that will allow you to maintain the lifestyle that you have grown accustomed to. And I think, ultimately, at the end of the day, when you’re talking, you know, to most people who are thinking about retiring, they’re like, how can I replicate my paycheck? How can I maintain the lifestyle that I’ve grown accustomed to for the last thirty to forty years working? And now I’m transitioning into this next phase of my life.

And so I think maintaining that long term perspective, I get the question all the time. Cory, you alluded to this earlier talking about when to invest cash.

People ask me all the time, should I put should I invest now? When should I put the money in?

And my answer and I don’t want it to come across as emotionless, but, you know, I respond back and I ask them, are you a long-term investor? And if they say yes, then it doesn’t really matter when you put the cash in. Because if you’re invested for the long term, history, data, everything has suggested that staying invested long enough, eventually, the market produces positive outcomes.

Now, right, there’s no guarantee on that. We all understand that. But given enough time in the market, you know, being a long-term investor, you will more than likely experience better outcomes than, you know, worse outcomes. Now in the short term, that’s a little bit harder to judge.

Right? Like, we don’t know what tomorrow looks like. We don’t know what the next six months looks like or even the next year. But the more clarity there is over a longer period of time, maintaining a longer-term perspective, I think, is really important.

And this is also kind of, this is twenty first century. This is probably coming more and more, I guess, popular or relevant, every day. You know, I think about all the smartphones that we have now. Right?

We get push notifications sent to our phone. Breaking news or, you know, breaking news, this happens. Breaking news, the Dow Jones is down two thousand points, and it’s right there at the tip of our fingertips on our phone. And it’s in some ways, to your point earlier, Cory, somebody’s trying to get your attention.

They want you to click on that. That’s ultimately everything. That’s what the phone is built to do. That’s why push notifications are a thing.

They’re trying to get your attention, and that did not exist twenty, thirty years ago. And so in a situation, you know, twenty years ago when the S&P has a bad day, you didn’t really know about it unless you watched the five thirty news or if you woke up the next day and read the newspaper because it just wasn’t as, you know, available to you. It wasn’t in your face. It wasn’t being talked to or spoken about as frequently.

The downside that has is it plays into our emotions. Right? We are more informed than ever as consumers. We can get information at the at you know, typing into our computer and getting information.

The downside that has is there’s confirmation bias, and it plays into our emotions. And so when we see headlines of here’s the ten hottest stocks or you need to sell and go to cash, right, we intuitively, as human beings, just the way we are wired, it plays into our emotions, and then it starts affecting our decision making.

And I always hesitate, you know, people who read a headline or hear something on a podcast or a radio or whatever it may be because they’re trying to get your attention with something. Right? That’s really what it is at the end of the day. And so you really just have to proceed with caution and take a step back and have the sense of, is this really going to impact me?

And if it impacts me, exactly how is it going to impact me? Because I would argue, going back to twenty-six when, you know, the S and P five hundred was first incepted, there’s been daily headlines every day going all the way back over a hundred years. The only difference now is we are now more likely to receive updates on what’s happening every day because we live in a twenty-four-hour news cycle, and all of that information is being pushed to our phones that most of us are looking at every day. And so it’s a tricky balance.

It’s a slippery slope but just be aware. You know? Don’t get too caught up in the headlines because that’s where I see a lot of, you know, emotional decisions happening in that regard.

And then I think lastly on this, I mean, this goes without saying, focus on what you can control.

Don’t focus on what they’re talking about on TV or on the radio because a lot of that is outside of your control.

The things that are in your control are how much you spend, how you live your life, you know, what’s your risk tolerance, you know, how aggressive or conservative you should be. You can control those things. You can’t control what’s happening somewhere else in the world. You can’t control what somebody says or somebody does.

It’s outside of your control. Focus on what is most important to you and ask yourself, can I control this? And if the answer is yes, great. You should do something about it.

If the answer is no, I can’t do anything about it, try not to let your emotions get in the way of making those, in this case, I guess, good financial decisions.

Cory, is there anything else that you would kind of add to this, you know, in Yeah. Anything that I didn’t touch on?

Yeah. No. I think you did a great job covering that. The long-term perspective is really important.

And I think, you know, again, I mentioned it. It’s come up in basically every section we talked about because we think it’s that important. I think the number one thing you can do to control all of these different outcomes and really, you know, have a better handle on your financial life is building that comprehensive plan. If you’ve planned correctly, you know, again, every dollar coming in or going out of your pocket, if you’ve planned for that correctly, you can mostly disregard market fluctuations and over the long run, significantly improve your chance of success.

And not only your chance of success, but also your confidence and comfort throughout all of that. And so that’s why that that’s what we do with everyone we work with. That’s what we recommend everyone does, you know, whether it’s with us or not, is to have that plan and really think through the numbers. Once you have a grasp on that, again, you’re only gonna be more comfortable kind of weathering the storm, so to speak.

So, yeah, given all of this, we wanna leave you guys with just some timeless investing principles that while technology changes, companies change, the way human behavior, you know, changes over the course of time, there’s still core principles and beliefs, you know, that we have here at Savant that, you know, we don’t really think have changed over the course of the you know, Savant being in business, you know, now going on forty years. And so thinking about, like, to Cory’s point, your financial plan must be integrated with your investment strategy. Right? Asset allocation is important. You know, markets tend to be more efficient than not, meaning that if you think you know something that somebody else doesn’t, that that’s probably not the case. Right?

Stock picking is really hard. Crypto picking is really hard.

You know? And, you know, spread the risk. Right? Diversification, you know, that’s where you know, these are the things where some of these things are in your control. Right?

Most of these things are in your control.

This is where, you know, you should spend most of your time and your thoughts and your beliefs. Right? Like, it doesn’t it matters to a certain extent, but whether the market went up or down on one day, how much does it really matter? Right?

You have to ask yourself that question. Like, well, tomorrow’s a new day. Right? You know, the exact opposite could happen tomorrow, what happened today.

And there’s always a chance of that. Right? There’s no guarantees in life. There’s no guarantees in investing.

I think at the end of the day, the more planning, proactiveness you can do on that, it’s really, it’s more of a confidence builder for yourself.

So having these beliefs and having these philosophies and having it would be well thought out, man, if the market goes through a difficult time period, you know, you should be sitting there saying to yourself, like, I planned for this. My adviser helped me with this. This is great. Like, this is all part of the plan, and I don’t, I don’t really think about this.

I have so much peace of mind knowing that I’m in a good spot, and I understand all the different ways that this impacts me. That’s ultimately, you know, that’s ultimately the value that you get, you know, from working with an adviser. And so, we just wanted to highlight some of these. You know, Cory, is there anything you would add kind of before we wrap this up?

Yeah. I think you did a really good job of covering it. Only thing I would say here is that these are the key aspects of our philosophy. And, again, this is evidence based. We’re looking back and saying, how do we take the best step forward every day?

A comment I’ll make here is we continue to test and challenge the validity of our thinking, and it continues to show to be the right long-term strategy.

World we live in today is constantly changing. So while the strategy is time tested, and doesn’t change much year to year, we continue to refine it as needed and make changes. That’s also why, you know, working with the people we work with, it’s not a quickly build the plan, hand it off, and you’re done. It requires some maintenance to go through. It could because you can’t just the concept of set it and forget it doesn’t truly exist because the world continues to evolve. And so that process of refining and tuning it every year is what, you know, kind of comes back and reinforces that confidence that you’re making the right all the right decisions and using that sounding board to really make smart financial decisions.

So you there’s going to be a link, that gets put in the chat that you can use to schedule a call with us. If you have questions, you know, comments, you know, obviously, we’re here to help and here to answer any questions that you have. So feel free to go ahead and use that link, schedule a call with us, and we’ll be more than happy to discuss that with you. We also have a & q and a portion of this that we’re going be taking some questions. So if you have questions, if you have put them in the chat now, go ahead and do that.

Before we get to those questions, I’ve been told by our compliance department that we do have to share our disclosures with you. So this is the compliant portion of our presentation that is required, that I always joke about, but, obviously, you know, this is very important as well.

But let’s go ahead. Let’s open this up to some q and a, Cory, that has come through. I’m going through the chat right now, kind of filtering through some different questions.

The first question that we got in kind of looking through this is, how are you actually using AI in my financial planning today, and, what are some of the benefits? Do you want to do you want to take that first, or you want me to start there? How do you, you know, how do you want to approach that?

Yep. You go ahead. I think you covered some of it in in those initial slides.

Yeah. So I think the biggest benefit of AI and I’m only going to give one example because we could go through a lot. For example, like, on the we talked about, like, the trading, the portfolio implementation, the rebalancing aspect.

I don’t think if you don’t if you don’t do it every day, you don’t realize just how quite of a manual process that used to be to place trades, review portfolios, rebalance. Like, there was a very manual process there. You had to search individual individuals, kind of look at their portfolio, look at the risk tolerance bands, and determine whether they were out of weight or out of out of balance.

I think one of the uses AI does now is it has a way of kind of, you know, looking across all different individuals, and it’s it’ll flag, you know, this person’s either out of tolerance plus or minus three percent. This person’s out of tolerance plus or minus five, ten, and it just brings all of that data to light. Right? So now you have a short list of individuals that you’re working with who you proactively contact and say, hey.

You know what? You know, markets have changed. You know, investments have shifted, and it allows you as the adviser now to be having more high value touch points with your clients more frequently throughout the year. So that’s more so what I’ve seen.

You know? And that’s just one example. But, Corey, is there anything specific that you’ve seen or kind of how you’re using it in your day-to-day practice?

No. I think you covered it well. Again, it’s we’re in early stages of really adopting and using artificial intelligence. I think, you know, it’s a very fast-moving environment, so we’re going to continue to see changes over the next couple years here.

And I would say as we go, you know, I think where we’re early stages right now is getting rid of a lot of the systematic things that are out there. You know, a lot of the minor trading, keeping portfolios in balance, taking notes in meetings, things like that, kind of as you mentioned. And so I think the next iteration will be getting more involved and maybe even using AI in meetings with clients to kind of engage and have conversations with almost a third party in the room to be a soundboard for the group as a whole. So, I see more of that coming. But, again, I still think that the value comes in that hybrid approach of knowing how best to use it, and having someone with some, you know, internal knowledge of the industry that can get the best results out of AI.

Yeah. So we got another question.

And I’ll start here because I think I was probably the one that that made this comment. So since the four percent withdrawal rate is outdated, what is the current approach?

This is a great question. And this is something that, this actually, I dealt with this very early on in in my career, you know, a little over a decade ago.

And it was, you know, working with somebody, you know, circumstance where it’s like four percent is kind of the old rule of thumb. Right?

Well, what if four percent in any given year isn’t enough to do the things that you want?

Right? Like, what if you want to take a trip to Italy or do a family vacation and go camping or give to charity? Like, what if that violates your four percent rule?

Well, then I would argue, like, your four percent rule is not it the four percent rule is preventing you from doing the things that you want to be doing. And I don’t think that is the way to kind of live your ideal years, right, in retirement and things of that nature.

And so I think what is now becoming more common practice, and there’s a there’s a self-realization amongst advisers ourselves, it is very common for individuals to spend more money early in retirement than it is later in retirement. And sometimes this is counterintuitive because you get the question of, like, well, what about long term care? What happens if I have to go into a nursing home and things of that nature?

You know? Yes. Those are very high cost, very high expensive, you know, life events that you may run into.

But generally speaking, if you run into that scenario, unfortunately, you know, the average lifespan at that point is probably only three to five years because you need a higher level of care. And so it’s a shorter time period. It doesn’t have as drastic of a result as you may think. Whereas in the early years of your retirement, this is where you’re doing the travel, going out to eat, spending time with family and friends, like, doing the things that you enjoy.

And so it’s kind of like a little bit of a you kind of let’s say you’re spending let’s just use artificial terms. Right? Like, six percent six percent, and then maybe you dip down a little bit. You’re spending five percent five percent.

And then you get later on in life, and it’s like, oh, I’m not spending as much because I I’m not physically able to do those things anymore. And I think that’s the revelation I’ve seen. I don’t Cory, do you have, you know, a different opinion on that?

No. I agree. I think, you know, the four percent rule is still if you’re young and working and trying to figure out, you know, what do I need to save to retire at x age and provide myself with x amount of income, you can use the four percent rule, you know, broadly to kind of back into that number. But when it comes to your individual planning, it comes back to, you know, the four percent rule applies as a blanket.

It’s not personalized. It doesn’t factor in your annual charitable gifting, as Jeff said. It doesn’t factor in kind of the miscellaneous expenses that come up. And the four percent rule also changes as you as you get older, as your portfolio changes.

So what might be four percent for a person who just retired at fifty-five, you know, you can prob if you’re ninety, you can probably be pulling out a significantly higher percentage than that four percent because your time horizons are different. So I think, again, it’s a good rule of thumb to keep in mind, but is not personalized and won’t provide you with really that that confidence and freedom to spend the money that you spent so long saving. If you only pull four percent, you’re going to pass along a lot of money to your heirs and family.

Yeah. So we got time for one last question. And, Cory, I’ll let you take the first stab on this, and then I’ll chime in. So you talk we talked a lot today about the approach for investing money for the long term. What about investing in a shorter-term time period? And if you’re retired or close to retirement, how does how does that change the opinion on that?

Yeah. Yeah. So, again, I think that question comes back to the plan. So long-term investing isn’t necessarily saying that we’re not factoring in short term expenses.

What that really is more saying is that we’ve planned around them. If there are things coming up for you that we know you need money for in the next six, twelve, twenty-four months, we want that money to be available and not subject to that volatility you see in the stock market.

So, really, effectively planning, figuring out what life costs for you, what are the big expenses coming up, and having that money put into an asset that’s not gonna move and have that same volatility of the stock market is still long-term investing. It’s just what it’s just that mix of investments that’s most appropriate for you. So, again, long term is not saying that that’s all in stocks. It’s just saying that you have an allocation or an investment mix that takes into account all of your priorities and spending as well as your time horizon, and it’s gonna give you the best chance of having the best outcome with that.

Yep. Yeah. My only thing I’ll add on that, specifically to that question, as it said, you know, if you’re getting close to retirement.

I would say, you know, good rule of thumb, you know, when you’re getting close to retirement in terms of when should I maybe start being more conservative, well, it kind of comes down to what you need in terms of cash flow needs. But it’s good to start thinking about that probably three or five years before you retire and really start looking at how you’re invested. And if you’re gonna need regular cash flow from your portfolio three to five years from now, you need to start thinking about, okay, how aggressive or conservative should I be? But on that point, just because you’re retiring, remember, it doesn’t mean that you’re done investing.

Right? Like, if you’re retiring at sixty, you know, you could live for another twenty-five to thirty years. So you still wanna make sure that you’re invested prudently and appropriately going forward. Because as we mentioned earlier, inflation is not your friend when you retire.

It’s actually your worst enemy, and you wanna make sure you’re still continuing to outpace that, you know, once you’re on a fixed income. So those are my closing thoughts on that. I know we’re coming up on time, so I just wanted to say thank you to everybody who joined our webinar today. We hope you found it helpful.

If you have questions that we didn’t get to, feel free to put them in the chat. We’ll be we’ll do our best to get a response back out to you as well. And then as I mentioned, if you have questions or would like a follow-up phone call, use the link in the chat, or you can go to our website to get more information there. So, thank you, Cory, for spending some time with me today. It was a pleasure, and we’ll hopefully do this again at some point.

Yep. I enjoyed it. Thank you all very much for joining.

Alright. Take care, everyone.

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