Co-Founder-President-CEO, HealthView Services, Topsfield, Massachusetts.
On demystification: “It’s critical to explain today’s exponentially more complicated products to consumers so they can make decisions…Firms who do that are going to be the big winners.”
The enormously controversial, divisive issue of health care reform has been on everyone’s radar screen for a year at the very least. But why do financial advisors typically ignore health-care costs when helping retirement-planning clients?
“It’s the elephant on the table,” according to Ron Mastrogiovanni, president-CEO of HealthView Services, a computer software and asset management company he co-founded about two years ago to encourage FAs to address the matter.
For 12 years, the enthusiastic Mastrogiovanni, 58, ran the money management group at FundQuest, a firm similar in construct to HealthView that he and two others launched in 1993. By the time they sold it to BNP Paribas Group in 2005, he’d expanded the company to more than $12 billion in managed assets for some 80 institutional clients.
The veteran portfolio manager hatched the idea for HealthView while looking after his aged parents, both of whom required round-the-clock medical care.
“If a couple who’s now in their late 50s reach age 90,” he says, from his Topsfield, Mass., office, north of Boston, “they’ll be spending [with inflation] a staggering $20,000 apiece annually — including supplemental insurance — for out-of-pocket medical expenses. And that doesn’t even cover long-term care, like nursing homes. Isn’t that incredible?”
Mastrogiovanni, known for his entrepreneurial savvy, has stewarded a number of small high-tech firms to high profitability.
“Ron has probably the best sales instincts and ability to analyze people’s needs of anybody I’ve ever known in my life — and I’m 63. He understands how to develop products and services around opportunities,” says Bill Butcher, formerly FundQuest’s senior vice president, now senior VP of money managers at Natixis Global Associates.
HealthView’s main customers are big banks and insurance companies, but versions of its unique software are available direct to financial advisors.
One such program assesses an individual’s heath risks, projecting customized out-of-pocket costs based on health history. The software even accounts for, say, future complications a Type 2 diabetic might suffer.
But health care is only one element under the HealthView umbrella. Based on a collaboration with the Retirement Income Industry Association (RIIA), the firm offers software that calculates an investor’s all-important “income floor.” That minimum determines the funds needed to be invested in conservative asset classes to guarantee that fixed and variable expenses — including health care — are covered in retirement, regardless of market and economic calamities.