I had an opportunity recently to talk shop with many of the industry's top advisors. One of those, Reston, VA-based Rick Clark of Clark & Associates Inc. was kind enough to answer five questions that the editorial team at Senior Market Advisor has been kicking around..
1) Have you changed the way you do business, or do you have plans to make changes in light of regulatory changes? We have definitely made changes in the way we do business in the light of regulatory changes. We recognize that the only thing that's constant in this world is change. Keeping up with regulations is a part of this job, and one that my office continues to do fairly well. The regulatory changes are in the best interest of the most important person, the client. If these changes protect more people from being ripped off, scammed, and Ponzi-schemed then I am all for them.
2) In what key way (or ways) do you incorporate suitability into your selling approach? Suitability is the key word in every presentation. The word 'why' is the key word in every presentation as well. Why the client wishes to do what they do? Why does the client invest the way they do? And, lastly, why it has become necessary to change? We educate clients and have them understand that the way of the 90s does not work. Financial experts have coined this the "lost decade." It is essential for our practice to educate our clients about the new normal. To educate them that this new normal must be adapted to, in order for their hard earned assets to survive and to thrive.
3) How have you customized or changed your business to address the needs of the new baby boomer generation of clients? We realize every individual has his or her own set of needs and desires; therefore, we must customize every plan based on what information we can collect from our clients. This information is concerning their lifestyle, monetary needs, estate planning needs and legacy planning desires. The baby boomer generation has a unique set of needs. Because of the advances in the medical field and lifestyles in general, baby boomers will have to deal with the No. 1 fear, and that is running out of money. The biggest problem that I see when it comes to the baby boomer generation is the fact that they do not, and have not addressed the situations before them. While living longer is a good thing, it also presents challenges that generations before did not have to deal with. We, as responsible financial advisors, must recognize the need for preservation of capital and sustainable income, all while achieving a reasonable rate of return.
4) What advice or help are you able to provide to clients to help them make sense of and plan for the health care legislation? The cost of health care in the future will be such that most people will probably not be able to afford it. With Social Security running out, Medicaid and Medicare being depleted, we believe that self insurance is very important. We feel that asset-based long-term care will be a great complement to other health based LTC policies.
5) How would you define your approach to being an advisor and developing an overall financial plan for your clients versus being a salesman and pushing products to them? Our approach to being an advisor and developing an overall financial plan for our clients is very different from the salesman approach. We dig very deeply into their feelings and emotions on how they would like to see their retirement and financial plan develop. It all starts with why. Why do you feel that way? We act as the quarterback between their attorney and CPA or accountant to make sure we have covered all the bases of their financial plan in a tax efficient manner. Do they have the right legal documents in place? Our philosophy is that this is a process that takes time to develop and implement, but in the end, you will feel better about getting sleep at night.