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Retirement Planning > Retirement Investing

All About the Numbers?

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Fidelity’s new retirement income tool, the Fidelity Retirement Income Evaluator, has a neat feature. It incorporates Monte Carlo software so an advisor can illustrate to a client the probabilities that a given retirement distribution plan won’t exhaust the client’s nest egg over a given period of time. A neat feature, yes, but the really cool thing for advisors is that they can click a button on the Evaluator and view the expected performance of the portfolio over those 20 or 30 years, and see the assumed tax rate, and the assumed inflation rate in actual dollars over all those years. Icon Funds, the mutual fund company out of Denver, has been running an advertising campaign in this magazine and others whose theme is “Strength in Numbers: Quantitative. Value-Based. Show Me the Numbers.” That’s smart, because like Fidelity’s income tool, Icon’s ads reflect an understanding of the way an advisor’s mind works. He wants to see the numbers. She’s from Missouri: Show her.

When it comes to producing numbers on the advisor community–whether it’s RIAs or broker/dealer reps–the firm that’s at the top of the list is Moss Adams, the Seattle-based accounting and consulting firm that has just released the 13th edition of its Studies of advisory firms.

Our cover story this month, written by Philip Palaveev and Dan Inveen of Moss Adams, presents the findings of the 2007 Study on compensation and staffing (page 36). The growing demand for objective financial advice, the researchers found, is leading to a growing demand for advice givers, which is leading toward growing salaries and other compensation for those advice givers. If advisory firms want to compete effectively, Philip and Dan argue, they must grow their own talent and not rely on the wirehouses or insurers or colleges to provide them with the finished talent they need to handle the growth in clients and firm infrastucture. Based on exhaustive surveys of 728 advisory firms around the country, the article provides the numbers, and the analysis. The second piece in our “By the Numbers” package relates the results of another big, fascinating study, this one done by Julie Littlechild of Advisor Impact on the time management skills of the best advisors (page 46). There are two kinds of efficiency experts when it comes to successful time management at advisory firms, and Julie explores both varieties. A third article that I’m particularly happy to present for your reading pleasure is the third in a series on alternative investments by Michael Fischer–this one presents the nuts and bolts of how to conduct due diligence on private equity, managed futures, and hedge funds.

The best advisors, however, aren’t satisfied with just the numbers. They need to be as well-versed in the behavior (and misbehavior) of clients as they are in the performance numbers of investments and the style characteristics of money managers. That’s why Olivia Mellan’s latest foray is a must read for all. Following on her exploration of the money dynamics of mother-daughter and father-son relationships, this article (page 56) plumbs the lasting effects of sibling relationships. In the end, it’s all about the numbers, and the relationships.


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