Sweet Spot: Comprehensive Planning For Boomer Execs

Sweet Spot: Comprehensive Planning For Boomer Execs

As the lines demarcating formerly separate professional disciplines continue to blur, insurance and financial advisors find themselves buffeted by twin forces: (1) the need to specialize (as, for example, in catering to a particular demographic group); and (2) to offer even more services to the individuals or business entities that have become their market niche.

Few groups, perhaps, offer advisors as great an opportunity for delivering comprehensive, creative and well-compensated financial services as the boomer executives now largely controlling the levers of Corporate America. The opportunity, producers say, lies specifically in integrating the executives nonqualified compensation packages with their retirement and estate plans into an overall solution.

“I absolutely believe that planning needs to integrate executive compensation with retirement and estate planning, particularly for the boomer generation,” says Scott Keffer, president and founder of Wealth Transfer Solutions, Pittsburgh, Pa. “Such integrated wealth planning allows the advisor to do more innovative strategies.”

Paul Gydosh, a managing director at Kensington Wealth Partners, Columbus, Ohio, concurs. Gydosh says he works extensively with high-level company officers and, to a lesser extent, their counterparts at not-for-profit organizations, to assist with both individual pre-retirement and executive compensation planning.

How does the process the work? Gydosh says he generally secures referrals to a corporate CEO, CFO or executive director to design a nonqualified group plan from an executive for whom he had offered individual retirement counseling. By pointing up to senior management weaknesses in the executive clients ability to fund post-retirement objectives, Gydosh says he frequently can gain managements ascent to a redesigned and more generous compensation package.

“In effect, we become the executives advocate,” says Gydosh. “We, rather than the president or executive director, will often present the new plan to the board. We can identify the cost to the enterprise of whats necessary to reward and retain the key employee.”

For highly valued execs, Gydosh adds, management may have a powerful incentive for beefing up the execs retirement package and, where appropriate, extending the package to other C-level managers. The risk of inaction: A Boomer exec in his mid-50s may opt to retire early, or else bolt to a competitor that offers more attractive benefits.

“Generally, the higher up you are in the organization, the greater is the chance of getting what you want,” says Gary Pokrant, a personal financial specialist with Reznick Group, Bethesda, Md. “If executives arent well taken care of where they are, theyll go where they will be. And so a very effective approach is to show [to senior management] what competitors are doing.”