* Co-authored by Jenny Ivy
Once again, we were heartened by the overwhelming number of qualified responses for this year's Advisor of the Year. Advisor after advisor told us what makes their business model unique, and how they effectively serve the boomer demographic so in need of unbiased and professional retirement advice. One small disappointment this year was the decided lack was female entrants. We realize it's an overwhelmingly male-dominated business, but we come across stellar female advisors almost every day, and would encourage more active participation next year.
As for this year, everyone had their particular favorites, and a number of arguments ensued. But after completely wrecking our immune systems with too much late-night pizza and black coffee, we arrived at a consensus. Briggs Matsko, Peter Mallouk and Bill Brown were all chosen for their creativity, enthusiasm and forward thinking in preparing their clients for unique challenges boomer retirement will pose.
We'll announce our winner in the upcoming May issue. In the meantime, we spoke with all three about what makes them unique and how they effectively serve their boomer clients.
California Fringe Benefit, a subsidiary of Lincoln Financial Advisors
$300 million in assets under management
Briggs Matsko joined the in financial services industry in 1974, and has seen many changes in the ensuing decades, but he's always been on the cutting edge. Sure, everyone talks about the need for effective distribution techniques now, but Matsko was one of the first. He's regularly invited to appear at high-profile industry events to share his income expertise, and we personally caught up with him and the Retirement Income Association as well as National Association for Variable Annuities conferences. The Retirement Income Matrix he developed (a model of which sits on his desk) has proven a useful tool with clients in illustrating the challenges ahead, and moving them from mostly abstract thinking about this vague notion of retirement to specific details. The pyramid divides expenses into four categories: Core, Joy, Goals and Legacy and he then discusses each in depth.
"While boomers are moving in mass towards retirement, they generally do not know how to think about the specifics concerning income distribution planning," Matsko explains. "This sense of bewilderment is a symptom of the complexity from all the factors that must be taken into consideration. Our process is to begin with a simple question as follows: Have you categorized your expenses in retirement and do you have a plan to spend down your assets and manage income sources? "
At this point he shares the concept of the pyramid matrix which was developed after many years of meeting with clients.
"People relate to images and graphics, therefore we use this familiar geometric shape as a simple way for people to categorize their expenses and link them with income sources in retirement," he says. "By taking the complex and making it simple, the concept and pyramid are easily understood. It resonates with clients and encourages them to further engage in the income distribution planning process."
Once the concept is conveyed, clients are given a data sheet to list their anticipated expenses in each category. A separate sheet lists income sources and assets designated for retirement. The data is then entered into an interactive software program that displays the results in an image based, graphical output that can be easily understood. Through various "what-if" simulations, he says, clients take ownership of their financial future in retirement leading clients from a sense of bewilderment, to peace of mind.
Matsko emphasizes that he does work with families and individuals of all ages, his passion lies in the area of retirement income distribution. As an advocate for the industry, Matsko is a founding board member of The Resource Group, whose membership includes over two hundred of some of the top estate and financial planners nationwide. He received his CFP designation in 1994, has been a Million Dollar Round Table member since 1987, qualified for "Top of the Table" every year since 1992 and has qualified for Lincoln Financial Advisors' top producer group, "Chairman's Council" every year since 1986.
Matsko, his wife Cynthia, and their son Reed live in Rancho Murieta, California. He enjoys golf, fishing and hiking as well as being actively involved in his community.
Creative Planning Private Wealth Management
$703 million in assets under management
"Boomers are a suspicious group; they're skeptical," Peter Mallouk tells us. "They want to know that they're working with professionals every step of the way. So when it comes to financial planning, the want CFPs. When we're drawing up and going over legal documents, they want estate attorneys. When we're doing their taxes, they want CPAs. This is want they want and this is what I offer. I have experts in every area."
Mallouk, a CFP and estate planning attorney is principal of Creative Planning Private Wealth Management in Leawood, Kan. Mallouk's firm provides comprehensive wealth management services to its clients, including investment management, financial planning, charitable planning, retirement plan consulting, real estate offerings, mortgage lending, tax planning and preparation and estate planning services (anything else we missed?).
"Boomers have already been through one wealth transfer, that of their parents," he continues. "So they don't want to lose their savings and investments to health and long-term care issues, taxes and fees that might eat into a compounded return."
Mallouk works with his clients to increase the probability of their money lasting longer by keeping fees low, using tax sensitive investments in taxable accounts, structuring qualified vs. nonqualified withdrawals in the most tax effective manner possible, and by using a core-satellite approach to investing. Each client has a customized investment portfolio that is then managed in-house, not farmed out to another firm. He uses bonds in most of his portfolios, focusing on guaranteed or high quality bonds that are tax exempt where appropriate. We combine this with high dividend, high quality companies to generate as much income as possible in a low cost and tax efficient manager.
"Questions are never answered in a vacuum," he adds. "We have to look at the whole. That's why we offer the breadth of services we do, and the expertise to go along with it."
Creative Planning Private Wealth Management has been providing wealth management services to high net worth clients since 1982, and currently manages assists clients in over 40 states. Mallouk is the founder, executive board member and former five-year Chairman of KC CAN, an organization dedicated to improving the quality of life of children in Kansas City. Mallouk also serves on the executive board of Pathway to Hope, a charity dedicated to supporting families coping with a mentally ill family member, as well as the boards of the American Stroke Foundation, Planned Giving Council of Kansas City Hospice and St. Michael's Finance Council. He's the recipient of the Wallace Galluzi Volunteer Award for his work with Big Brothers/Big Sisters. He's married to Veronica and they have three children, Michael, John Peter and Gabrielle.
William J. (Bill) Brown
Brown, Thomas and Co. LLC
$200 million in assets under management
"Bill's philosophy is unique among financial advisors," says a colleague. "He believes in never allowing a client to sell into their capital base to meet their income needs. This is a treasury management concept that you match your maturities to your obligations. In my 27 years in our industry, I have not seen an advisor take this approach."
A 1981 University of Michigan Business School graduate, Brown entered the famed Connecticut General training program that same year. He began the exclusively advisor portion of his career in 1992. By the late 1990s he reached $100 million in assets under management.
"Not a single one of my 50 clients (at the time) lost money in the economic downturn that followed," Brown says. "We did it by diversifying into sophisticated strategies early on; like hedge funds, REITs and oil and gas investments."
In the early spring of 2002, Bill and his partner, David Thomas, formed Brown, Thomas & Company, L.L.C. He works with a high number of widows and divorced women. In addition to financial and estate planning, Brown spends considerable time promoting his clients' interests in the investment management arena and his unique payment method lets his clients know that their interests are being served.
"If we don't beat a specified benchmark, we don't get paid," Brown says. "Yes, we may be up by 16 percent, but if the S&P 500 is up 19 percent, then too bad for us. Also, before we get paid the next time around, we still have to make up the difference form the prior reporting period. Other advisors talk about being on the same side of the table as their clients. This way, we ensure we really mean it."
Brown has more than 24 years of financial planning to high-net- worth individuals. His ability to combine complex planning techniques and sophisticated financial modeling, in an understandable and individualized format, sets him apart. His client profile has changed little over the years with many of his long term clients now well into their retirement years.
It's a track record he can now show his boomer clients. All, he says, are financially affluent, caring, intelligent and very private individuals. Only by maintaining complete confidentiality and the highest integrity of service has he been able to foster these long term, mutually beneficial relationships.
"A professor I had in business school told us, "Boys, always make sure you match your maturities with your liabilities,'" Brown says. "It may sound simple, but it's something that stuck with me all these years, and it's worked for my business and, more importantly, my clients."
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