New York-based CPA Ed Slott doesn’t get to spend much time at home. He’s too busy traveling the country, teaching advisors and consumers alike about IRA distribution strategies that are the key to effective wealth transfer.
From January through August of this year, Slott completed more than 60 speaking engagements in 23 states and Washington, D.C. “I love what I do. Without that commitment and passion I could not possibly keep the travel schedule that I do,” Slott says. “But most of all, what keeps me going is simply the ability to challenge the status quo and transform the retirement industry, by creating a new breed of competent advisors that consumers can rely on for their financial security.”
Slott says most consumers have low expectations of their advisors because they are unaware of the fantastic opportunities available to retain, grow and pass on their retirement savings by capitalizing on the numerous benefits buried in the tax code. “Most advisors are unaware of these as well. I am on a mission to educate the consumer to expect more from their advisors and to educate the advisors to earn the business.”
Between trips, Slott took a few minutes to answer some questions from Senior Market Advisor .
Senior Market Advisor: Can you briefly put into context the type of opportunity that is available today for advisors to help clients with IRA rollovers?
Ed Slott: I call this the ” perfect storm of IRA opportunity ” for financial advisors. There are trillions of dollars in retirement accounts right now and millions of people who have to take distributions from these accounts ? and this trend is just beginning. The money is just pouring out from every segment of the population and more people need to rely on more advisors than any other time in history.
Most of the money clients have today is in retirement accounts. But this money cannot stay stagnant forever. Because this is tax-deferred money it eventually must be withdrawn, generally when three events happen: Death, reaching age 70? 1/2 or when people retire or change jobs. All three of these events are happening in record numbers right now, and this is just the tip of the iceberg. The numbers of people will only keep on growing rapidly for at least the next 15 to 20 years. What an incredible opportunity for advisors who pick up on this and take advantage of it now.
More people than ever before are searching for advisors with specialized knowledge in retirement distribution planning. The pendulum has swung from the accumulation phase to the distribution phase. Record numbers of people are looking for an exit strategy for their money and they have no problem moving money from their current advisor to a new advisor who has the knowledge and competence in distribution and estate planning for retirement funds.
SMA: Do you think advisors generally know enough about strategies to protect their clients’ wealth from unnecessary taxes, and are they doing a good enough job of employing these strategies in applicable situations?
Slott: No, they certainly don’t. Much less than 1 percent do, but that spells tremendous opportunity for advisors willing to invest their time in learning these key planning strategies and tax rules. The few advisors that do possess this knowledge are already seeing an exponential increase in business as well as clients desperate to work with them. Clients are beginning to realize that it is not how much they accumulate, but how much of that accumulation they can keep and pass on to loved ones. They are moving record numbers of retirement assets to advisors who can help them take advantage of the tax rules and keep more of their money in the family.
SMA: What can advisors do to better prepare and educate themselves in this area?
Slott: Advisors need resources and specialized knowledge if they want to attract this wave of retirement money. They need to invest in their education. People want to know that you have at least one book on your shelf on this topic before they turn their life savings over to you. If you want to hold yourself out as an expert, you must have access to the knowledge. This means you have to read and learn as much as you can about retirement distribution planning.
There is no doubt that this specialized knowledge is attracting money and lots of it. I know because I have taught more advisors in this area than anyone in the country and I hear the success stories. The advisor who invests the most in his education always brings in the most business. The new advisors are selling knowledge first, and then product.
Attend any program you can on this topic, even at your local professional association. You will always learn something and meet someone who can help you tap into this market. The key is learning and catching the wave of this new retirement money.
Also, read all you can on this topic. Newsletters are filled with the latest rulings, tax law changes and planning ideas. I highly recommend reading “Life & Death Planning for Retirement Benefits,” by renowned IRA guru Natalie Choate. This is the bible on IRA distribution planning and every serious advisor should have this on his bookshelf.