A partner in changing times
One of the firm’s key goals is managing human behaviour, with the understanding that weak portfolio performance is more often a result of irrational human decisions than market performance itself. The team studies behavioural economics to understand the challenges advisors face around volatile times. Just as they try to add rationality to market decisions, they’ve built out tools to take the emotion out of both asset allocation and estate and tax planning.
Natale cited the example of estate planning, where a client might be concerned about giving an inheritance to their child, worried they’ll spend it unwisely. He espouses the annuity settlement option, which designates the inheritance received in the form of an annuity, delivering guaranteed instalment payments rather than a lump sum. In a potentially contentious inheritance situation, the Manulife Investment Management team advocates for segregated funds, a key investment tool that can protect a segmented inheritance from the public eye, or even other family members if necessary.
“What we're trying to do is preach discipline – discipline in terms of asset allocation, discipline in terms of how we make decisions, how advisors should make decisions based on fundamentals, not the latest panic in the news,” Petursson said. “If you stick with discipline to the process, when the markets are down, you're going to suffer some downside, but not nearly as much because discipline guided you to the right decisions.”
In the end, Manulife Investment Management’s tools are there to help advisors who are juggling a lot right now. Between finding new money, retaining clients, managing portfolios in a trying market and justifying fees, advisors can often feel like they’re spinning plates. Natale thinks advisors manage the big-picture stuff well, but their jobs now include a range of details that could, if overlooked, make or break an advisor’s strategy. He says Manulife Investment Management’s job is to help take care of those details.
“One of my biggest sources of happiness is demonstrating the potential value that we can bring to advisors and their clients,” Natale said. “Our goal here is to help individuals with their tax, estate and retirement planning goals, and we see the advisor as the key to that. Advisors have the clients’ best interests at heart, and I think they pick up on our tax and estate planning advice really quickly. We're able to impart that to advisors in a way that they can not only understand it, but they can then explain it to their clients so that they can understand it. And I think that’s very rewarding for them and for their clients’ end goals, too. It just breeds more success.”