Five Questions for the Top Retirement Advisor

A conversation with Joe Montgomery, Optimal Service Group of Wells Fargo Advisors, Williamsburg, Va.

What retirement issue has hit you or your clients out of left field, and how did you resolve it?

Although it is a bit obvious, the issue that has hit us and our clients has been the speed and magnitude of the decline in account values since the downturn in the economy. Since then, we have focused on making sure that our clients are appropriately diversified and poised to take advantage of the recovery. Another issue for some has been maintaining needed cash flow. For those clients, we raised the amount of cash needed to hold in the account to ensure needed income would be available.

What prospecting methods have been most successful for you in attracting retirement-planning clients?

The prospecting method that has been most successful for us has been providing "optimal" service and advice to current clients. By doing so, we receive a number of referrals through clients who appreciate our honesty, advice and experience.

Do you face any frequently occurring retirement-planning mistakes with prospects?

Retirement-planning mistakes that we frequently see include clients holding onto concentrated positions. For a variety of reasons, clients (and prospects) seem to be committed to maintaining positions that we believe should be more diversified in this volatile market. Another mistake we see has been "miscalculation" of risk tolerance. Prospects who thought they were long-term growth investors have learned over this past year how volatile that strategy can be. With the market the way it has been, we have found, diversification among asset classes may be the best strategy to cushion one's portfolio.

What challenges do you face when modeling clients' retirement incomes and cash flows, and how do you resolve them?

One recurring challenge we face when modeling clients' retirement income and cash flows is that clients lose track of what they are spending. They tend to overspend relative to their assets. We resolve this issue by focusing on our investment planning process (Wells Fargo Advisor's Envision process) to help them truly understand what will happen if they don't adjust their level of spending.

What mix of products and solutions do you use most often and why?

Following the downturn in the market of 2008, I believe many investors are concerned and want to slowly step back into the markets. Accordingly, we have repositioned some of those portfolios to include short-to-intermediate fixed-income investments. We also like managed strategies that seek to achieve dividends, and may have potential for increased stock values. In general, we believe a "tactical overlay" may potentially help to minimize risk while providing the opportunity to participate in an upside.

It is important to note that each investor's individual situation should be reviewed prior to making investment decisions, or participating in any trading strategy, and this or any other strategy may not be appropriate for any one particular investor.

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