The Advisor’s Compass: Navigating Market Shifts and Maximising Your Practice with Garry Crole
A New Monthly Resource for InterPrac Financial Professionals, brought to you by Capital Prudential.
Welcome to the inaugural edition of “The Advisor’s Compass,” a new monthly video series aimed at fostering a strong sense of community within the financial advisory space.
Hosted by Garry Crole, CEO & Managing Director of Sequoia Financial Group and co-founder of InterPrac, this series provides valuable market insights and practical tips to help you navigate the ever-changing landscape of financial services.
This month’s episode is proudly sponsored by Capital Prudential, an alternative asset manager specialising in innovative real estate development, with a unique approach to generating predictable income streams for investors.
Capital Prudential have an innovative approach to fixed income leveraging their deep experience in real estate development.
The Fund offers a unique investment opportunity to access the attractive returns available from real estate development delivered as a predicable income stream whilst preserving capital.
Capital Prudential presented at a number of PD days and is encouraged to look at their SQM research and always consider the T&Cs.
Garry’s Market Update: A Year of Surprises and a Bit of a Heads-Up
Garry kicks things off with a look back at 2024, highlighting some unexpected trends and offering a balanced perspective on potential risks and opportunities.
Equity Markets Defying Expectations: Despite worries about rising interest rates and inflation, equity markets have performed remarkably well. However, this resilience might not last forever, so we have to be careful.
Sector Performance Standouts: Gold has been a ripper performer over the past year, with the NUGG ETF rising nearly 40%. Large global international stocks, tracked by the ticker code QUAL, have also posted strong gains of just over 30%. In contrast, bonds and property have lagged behind, while private credit and digital assets, even Bitcoin, are gaining traction within investment committees.
The Bank Stock Surge: Banks have seen a decent rally, driven by heavy index weighting in super funds and a perceived lack of alternative income options for those who like to play it safe.
The “Big 7” and the Nvidia Phenomenon: The tech sector’s been a real force, particularly the “Big 7” (Apple, Microsoft, Alphabet, Amazon, and Nvidia), with Nvidia experiencing massive growth. While the AI boom and data centre acceptance are significant, Garry reckons that the rapid appreciation from around $40 to $135 per share in the last year might be unsustainable. He raises concerns about the herd mentality of many global fund managers, who are terrified of underperforming the index and that’s driving the Nvidia rally.
Asset Allocation Remains Key: Garry reinforces the critical importance of sticking to asset allocations that match up with client risk profiles. History shows that investors often buy high and sell low, so it’s up to us to guide clients away from impulsive decisions driven by recent returns.
Looking Ahead: Growth, Volatility, and Finding the Right Mix
Garry believes growth stocks, particularly in tech, still hold potential but might face more volatility due to higher interest rates. He highlights the insights from Leo Barry of Frontier Funds Management, who suggests looking at the value potential of mid to small-cap “champions of tomorrow” rather than just following the pack. Advisors must always consider long-term client risk profiles rather than relying solely on last year’s high performing markets.
Garry also notes the dominance of the “Big 7” within major indices, and it’s critical to diversify to reduce risks if these companies face growth slowdowns or regulatory issues.
Key Takeaway: As advisors, it’s our job to get clients ready for both opportunities and challenges in the 2025 market. That means diversifying across sectors, looking at international markets, and always sticking to the appropriate risk profiles. Crole stresses that while clients might be happy with extra returns that don’t match their risk profiles, they’ll certainly expect compensation when investments turn sour, so managing risk is absolutely key.
Advisor Tip of the Month: Get the Most Out of Your Productive Hours
Switching gears to how we run our businesses, Crole shares a great tip from Martin Morris of Centric, pointing out that advisors have about 1140 productive hours each year. He’s urging us to focus on the tasks that actually make us money and get rid of lower-value stuff like admin, paraplanning, and meetings with BDMs.
Money-Making Activities:
Meeting with new clients (face-to-face): Focus on 1-2 hour meetings aimed at bringing in new business.
Meeting with existing clients (face-to-face and online): Keep building those relationships and providing ongoing service.
Catching up with existing referral sources: Strengthen your partnerships.
Creating new referral sources: Always expand your network.
Short client calls (5-minute check-ins): Stay in touch and keep clients in the loop.
Garry suggests planning a “model month” with about 100 hours of productive time. A good chunk should be face-to-face meetings with both new and existing clients, and some time should be spent actively chasing new referrals. By using our time wisely, we can make our businesses stronger and more efficient.
Key Takeaways for Advisors:
Stay in the Loop: Market conditions change quickly, so always keep learning.
Diversify Smartly: Don’t put all your eggs in one basket.
Focus on What Matters: Prioritise activities that boost your bottom line and grow your client base.
Build Strong Connections: Solid relationships with clients and referrals are the backbone of any good business.
Match Investments to Risk Profile: This is a must for all clients.
By applying these ideas, financial advisors can handle market changes, make the most of their businesses, and deliver top-notch service to their clients.
The first episode of “The Advisor’s Compass” gives us a good mix of market insights and practical tips to help advisors do well in a complex world. By staying up-to-date, diversifying our investments, and focusing on the tasks that bring in the dollars, we can keep building successful and impactful practices.
A big thanks to our partners, Capital Prudential.
