Life, as one learns soon enough, rarely rolls out according to plan. A stroke of luck, good or terrible, can change things in a flash. Life during retirement is no exception.
Meet affluent clients Connie Green of Neptune Beach, Fla., and Wendy and Michael Hale, who live in a suburb of Portland, Ore. Working with veteran financial advisors based on opposite sides of the country, these seniors saw their first retirement years shift in a direction they surely had not anticipated.
Green’s FA is John C. Barrett, 44, a senior vice president with Merrill Lynch’s private client group in New York City. In Portland, the Hales’ advisor is Bob Haley, 60, an independent whose Advanced Wealth Management is affiliated with Commonwealth Financial Network. Retirement funds account for about half the $1 billion in assets managed by the six-member Barrett Group. Haley, a solo producer, manages assets of about $70 million, of which 60 percent are retirement monies.
With Merrill for 21 years, Barrett caters to high-net-worth and ultra-high-net-worth clients. Haley, a former Dean Witter advisor, has been in the business for 25 years. He opened his own shop in 1990 and serves a wide range of clients, about 30 percent of them with a net worth greater than $2 million.
Barrett considers his role in the retirement-planning scenario to be that of partner. “We enable clients to envision their ideal life style, help them to understand the likelihood of achieving those dreams and goals, be disciplined, and make sure they don’t overspend in retirement. We put a lot of focus on risk management.”
According to Haley, the biggest challenge to advisors tackling retirement planning is managing retirees’ expectations. That’s typical of working with all clients; but when it comes to retirement, “one aspect is how much they can spend; the other is what they have a right to expect from their investment portfolio.”
Apart from investment expertise, Barrett and Haley bring an additional, deeper dimension to clients: sensitivity.
“We help our retirement clients prepare emotionally for the financial issues,” says Haley. To be sure, notes Barrett: “We’re part of our clients’ lives. We develop a deep bond. Our hearts are intertwined with theirs.”
An Unexpected Twist of Fate
That became abundantly clear when Connie Green’s story-book retirement was suddenly turned upside-down. Her husband, Stanton, former chief of orthopedic surgery at St. Vincent’s Medical Center, in Jacksonville, Fla., opted to retire at 57. “After a certain age, you’re not allowed to operate anymore, and he couldn’t see himself sitting on the sidelines,” says Green, youthful and energetic at 69.
But Stan didn’t want to just relax and kick back. He wanted to buy a ranch and become a cowboy. Connie, a Jacksonville socialite with a master’s degree in literature who was the first female board president of the city’s symphony, was reluctant. “I didn’t grow up riding horses; I grew up with the ballet! But Stan saw this as his future. He loved adventure — and I loved Stan,” says the one-time English teacher.
So the Greens sold their considerable assets — including a historic Georgian home on the river — and bought a 5,000-acre Colorado ranch and rights to another 25,000 acres for grazing. In 1994 they relocated there to raise cattle. “Financially they could certainly afford it, and I fully supported it,” says Barrett, who acquired the Greens as clients through the couple’s ex-Merrill Lynch advisor son.
The two dug in, working their 350-head commercial angus operation 24/7 — roping, branding, breeding, feeding cows and bulls three-and-a-half tons of hay a day — not to mention castrating steers (“Stan’s medical background,” says Connie, “stood him extremely well.”)
Before long, they were able to make a modest profit selling calves. Then, just seven years into “retirement” — two days before Christmas 2000 — Stan died. Connie had preceded him to Jacksonville to spend the holidays. Stan, coping with last-minute work at the ranch, planned to follow in a few days. The night before he was to leave, he was beset with stomach pains. Just the flu, he thought. Airlifted by helicopter to a hospital, in flight he suffered cardiac arrest. The probable cause, Connie says, was an infected lesion, the result of a ruptured appendix years before.
Her husband of 42 years gone, she turned to work for salvation and carried on raising cattle — all by herself except for one hired hand. Two years later, when the huge tractor she was driving, loaded with a ton-and-a-half of hay, slid down a snowy hill one day, she thought: “Why am I still here?”
So she sold the ranch and sent the lump-sum proceeds to advisor Barrett in New York. Though she’d handled bookkeeping for both the ranch and medical practice, Stan had overseen the investments. So “I wasn’t equipped to deal with that amount of money [from the ranch sale],” she recalls.
She moved back to Florida, bought and rebuilt a house on the ocean and started over. During the transition, Barrett “was a life-saver. We would talk on the phone constantly,” she says.
But Green’s financial upheaval occurred at a bad time: the 2000-2002 market correction. “Had we put all that money from selling the ranch into the stock market, it would have been a catastrophe,” says Barrett, who looks after Green’s account on a transaction basis.
“We needed stability and protection, especially with what Connie was going through. Her other strains were so great that I wanted to make sure her financial strains weren’t. First and foremost, we had to be certain that her accounts preserved the principal and gave her income and that she was able to recover from those life-changing events,” he says.
Previously the Greens’ portfolio was balanced between stock and bonds. Now Barrett overweighted bonds, putting Connie mostly in tax-exempts. As the market improved, he gradually increased the percentage of stocks.
Two Phone Calls, Unexpected Income
Meanwhile, at about the same time, diagonally across the country, the Hales were going through major changes of their own. In 2000, the couple, both then 58, decided to retire. Like Dr. Green, Michael was starting to feel a tad uncomfortable at work. A middle manager in database marketing at the Bank of America, he’d survived three company mergers in 18 years. But “the reality was that my job was going to go away in the next couple of years — Portland is not a major hub for Bank of America,” says Hale, 63, who was investing in a 401(k) plan.
He met the bank’s rules of retirement: age plus length of employment. “Essentially,” he says, “I negotiated being severed into retirement.”
That was in December 2000. The following month, Wendy retired from her job at the City of Beaverton’s public library, where she worked in technical services. The Hales sold their house and bought a smaller one in a planned community in suburban Hillsboro. Then they took off — day trips to the mountains, the desert, the ocean — and they made five sojourns to California.