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Many individuals who obtained significant wealth in the boom of the 1990s are suffering from inertia in todays bear market. What once seemed so easy about achieving their long-term financial goals is no longer as simple as collecting returns on investments.

But, according to a survey commissioned by The Phoenix Companies Inc., Hartford, having a formal, written financial plan in place can help wealthy investors move forward with confidence in an unpredictable market. The survey was conducted by Harris Interactive Inc., Rochester, N.Y.

And advisors who seek out investors who are unsure what to do next can “provide themselves some job security,” says Stephen Gresham, executive vice president and chief sales and marketing officer, Phoenix Investment Partners.

“Our survey shows us that in the overall group, a full 77% reported making no allocations to their portfolio, whether to increase or decrease risk as a result of economic impact of 9/11.

“Advisors who seek out the fiscally frozen can offer a recovery plan to get them moving and may even provide themselves with some financial security,” Gresham explains.

The annual Phoenix Wealth Management Survey says that 36% of wealthy investors have a formal plan and have fared better than investors who dont.

“Faring better” does not mean those investors have earned more money, says Walt Zultowski, Phoenix senior vice president, marketing and market research. It means that they experienced more peace of mind than investors who lack a plan, he says.

Phoenix refers to these two groups as the “planners” and the “fiscally frozen.”

“When we asked how are you doing on achieving a range of goals, the planners were already near achieving many of them, and have an especially comfortable standard of living during retirement,” Zultowski says.

The planners are less likely to say theyve become confused about the best way to invest money and are more likely to say their long-term wealth is extremely secure, he adds.

Also, the planners are more likely to say they are more satisfied with their advisor and would not be looking for a new advisor in the next 12 months, according to Zultowski.

There are no demographic differences between the planners and the fiscally frozen, Zultowski points out. They are in the same age group and have comparable levels of wealth, income, employment and education.

Based on this information, Phoenix has put together a tip sheet for advisors who want to work with the fiscally frozen. The tips are questions that can be put to clients whose answers can form the framework for a formal plan.

Questions on retirement planning prompt investors to talk about how they want to live out their retirement years.

Questions on estate planning prompt the investors to make decisions about how to leave their legacy.

Questions on income protection guide the investors through unknowns about the financial impact of disability or untimely death.

Questions on assisting children and parents can help an investor honestly discuss plans for ongoing support to her family.

“Hopefully this data will help to show that by having a plan investors can have more peace of mind if nothing else,” Zultowski says. “And we assume that underneath that theyre doing better financially.”


Reproduced from National Underwriter Life & Health/Financial Services Edition, September 23, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.