At Retirement Income Symposium, How Your Peers Deliver Income to Clients

Consensus is that the psychology of retirees is as important as the tools used to provide income

A RIS panel led by Jamie Green (far left), featuring (left to right) Carina Diamond, Rob Morrison and Zach Parker. A RIS panel led by Jamie Green (far left), featuring (left to right) Carina Diamond, Rob Morrison and Zach Parker.

Two practitioners and an executive responsible for implementing a broker-dealer’s comprehensive retirement planning platform took the stage at the 3d annual Retirement Income Symposium in Chicago on Monday afternoon, sharing with their peers their disparate yet similar approaches to how they produce income for clients in retirement.

The panelists, whose discussion was led by AdvisorOne Editor Jamie Green, featured Carina Diamond, managing director of SS&G Wealth Management in Akron and Cleveland, Ohio, who says that she builds a guaranteed income base of variable annuities for the retiree’s portfolio. Diamond wasn’t always a fan of VAs, but over time she has seen their value for clients, particularly during the market tumult of 2008-2009, though she warns that you have to educate yourself on annuities’ ins and outs before using them. Diamond’s standard bucket approach to retirement portfolios includes a first bucket of cash and cash alternatives meant to cover 6-18 months of expenses; a second bucket, 15% of the portfolio, in equities; and a third bucket of 25% to 40% in variable annuities.

Rob Morrison of Huber Financial, based in Buffalo Grove, Ill., said his RIA firm’s approach is to place retirement income planning as a “subset of the overall financial plan” and, like Diamond, takes a three-bucket approach to income that includes one bucket with 50% cash and fixed income—“where we’re pretty conservative on yield”—meant to cover the retirees’ expenses for at least 6-8

years. Morrison calls it’s a “highly customized approach” based on clients’ expected spending, which itself can be highly variable and which most clients found it difficult to accurately assess. Echoing the thoughts of his co-panelists, Morrison said “managing behavior is a good part of what we do,” mentioning that Huber Financial plans “set ranges on expenses” for their clients.

Zachary Parker, CFP, is the director of Annuities and Insurance for Omaha-based independent broker-dealer Securities America, which has made its comprehensive retirement income planning program a centerpiece of its attempt to differentiate itself from its BD competitors. That program includes training for its reps, a time-segmented approach to a retirement portfolio that “pulls cash from assets that are not down in value” at any given time rather than a systematic withdrawal approach, client questionnaires to help determine risk tolerance and spending needs in retirement, and a proposal generator. However, making sure the client sticks to the retirement plan is crucial, Parker said, noting that “you can’t discount the emotional drivers” of client behavior in retirement.

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