The Tri-Cities is a great area to be a financial planner. There are so many people to partner with who serve the community broadly and lead inspiring lives. It is an honor and a pleasure to support clients and their life goals, goals which in turn enrich the region for all of us. Even more, though, the Tri-Cities is a community with roots that energize not only many businesses and other organizations but are responsible for key tools and techniques in my profession. Let me explain.

Among the helpful and powerful tools that financial advisors have is computer software that simulates complex financial scenarios. 

Advisors can test and refine financial plans – referred to as “Monte Carlo simulations” – to assess and be prepared for a wide range of risks that an individual, group or business may confront. 

It is no surprise that this tool developed in the digital age, but the mathematics that drive it are older and have links to our community. 

Economist William Sharpe was a key figure in applying the mathematics of complex multifactor analysis to retirement scenarios and was awarded the Nobel Prize in economics in 1990. He began his professional career closer to here, however, starting his research as faculty at the University of Washington in the 1960s. 

A more intriguing connection is the source of the mathematics that Sharpe applied, which was developed to calculate the neutron diffusion paths for the hydrogen bomb during the Manhattan Project. 

The Manhattan Project, of course, spurred much of the development of the Tri-Cities we see now, from the original Hanford site to a community teeming with scientists and engineers. In my work as a financial planner, I have enjoyed working with scientists and engineers as clients and partners. In addition to the historical connection, experience has made me aware of a synergy between the methodologies that are standard for people in these careers and the best professional practices in my own field. 

Methods in common 

Let’s take a look at some of the methods shared by engineers, scientists and financial planners.

Financial advisors use arrays of organized data to make informed, objective decisions that align with clients’ financial goals. These can be both broader data fields (long-term trends, data specific to particular portfolios or assets, for example) and the data for individual clients. 

Engineers and scientists build what works to meet specific objectives (often solving a specific problem) and thus achieve goals. This is much of our daily work in financial planning, too. A strong plan has a foundation in strong, multifactor analysis, while calibrated to the goals of clients. 

Historical data and analytics help assess and manage risk. By quantifying the potential risks and rewards of various financial strategies, financial planners empower clients to make well-informed decisions that are specific to their individual financial situation. 

Designing a plan, experiment or tool is a critical process but not the end of the process. Financial planners regularly monitor the performance of investments and financial plans. The data-driven approach not only enables adjustments as needed to keep on track to meet goals, but best practices include multidimensional analyses that incorporate sustained monitoring and updating of investments and planning.

Our data-driven recommendations are designed to support lasting financial success. We look beyond short-term market fluctuations and aim to create strategies that stand the test of time.

As new data becomes available, we adjust our recommendations accordingly. This flexibility allows us to pivot when evidence suggests a better course of action.

In the Tri-Cities, it has been my honor to serve scientists and engineers. Beyond shared techniques as well as a shared history, we have been able to collaborate on plans, projects and life goals that sustain and grow the people and families in our special community.  

Nicholas Mercer is a certified financial planner, chartered financial analyst I and wealth advisor II at Piton Wealth in Kennewick.