Among the younger generation of planners, Aaron Coates of Compass Wealth Advisors in Elkhart, Indiana, is a visionary. He embraces the revolutionary approach of letting his clients spend their post-retirement savings on what they wish–either a dream trip down the Nile or retaining enough assets so that they can leave money to charity. His rebellious approach to planning–in which he allows his retiree clients to spend all of their savings, if they so desire–has even garnered criticism from older generation advisors who he says characterize his methods as “malpractice.”
Most financial planners don’t call extra money by its name, Coates argues. They call it “rebalancing the portfolio so it will be there to protect clients against future bad times,” he says. “We don’t have that.” Coates–who just turned 34–believes he is deviating from the older generation’s institutionalized approach to advisory practices by “getting into clients’ heads and seeing things from their framework.” Not surprisingly, Coates is also a founder of Next Generation of Financial Planners or NexGen, a community for financial planners aged 35 and under. (See a report on NexGen’s recent annual meeting.)
“Getting into a client’s head” and then serving her needs, means, for Coates, telling a woman client of his that she could spend her extra money on a trip to Germany, and also travel Europe for two months. Because of the untimely death of her daughter, Coates was well aware that the client knew how short life can be. He recalls how this client started getting choked up in the office when Coates told her she had the financial resources to make the trip.
A serious problem with the industry, he argues, is that advisors think retirees just want income. Planners are too focused on that, Coates says. At Compass Wealth, if the client is ahead of the game in terms of asset growth in any given quarter, the advisor calls the client and asks what the client wants to do with the money–save it, invest it, or spend it. A lot of times, they spend it, he says–even down to zero.
Salt of the Earth Clients