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Retirement Planning > Retirement Investing

Five Questions for a Top Retirement Advisor

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What retirement issue has hit you or your clients out of left field, and how did you resolve it?

Helping clients manage the securities market volatility-induced anxiety they are continuing to experience remains my focus. Our clients watch the news, read the business section, listen to business talk radio, talk to their friends and neighbors, and know someone (if not him or herself) who has been laid off. They have a hard time imagining a financial plan that shows long-term positive investment returns and inflation rates in the low to mid single digits.

In resolving and addressing client planning and investing anxieties, I try to help clients understand what they can and can’t control. Planning factors over which they have no control include: inflation, market returns, longevity, tax rates and future health costs.

Yet, they do have two significant controls: how long they work and how much they spend. If they can exercise control in those areas, then they have more power over their futures than they might have thought.

I also educate clients about “the extrapolation effect,” which is simply the erroneous idea that whatever is occurring today will continue into perpetuity. Finally, I emphasize that not knowing where they stand financially can fuel anxiety. Then I reassure them that, when we sit down to review their plan and portfolio, they’ll be fully aware of their unique situation.

What prospecting methods have been most successful for you in attracting retirement-planning clients?

Providing the best advice and service to our clients is invaluable to our group’s ability to attract new retirement-planning clients. It’s a priority for us to connect with each of our clients on a regular basis.

By being proactive, calling the client before we’re called, we demonstrate that we follow through on what we say we’re going to do. Often, initiating a review with our client results in a new client referral, additional monies being added to their accounts, or at the very least, good will and a more solid relationship.

Another prospecting method our group uses is “The Wise Investor Show,” a long-running weekly radio program that gives a voice to our consistent, value-oriented, risk-averse philosophy. We also host a large Annual Outlook seminar that reaches as many as 800 clients and prospects who participate either in person or via a webinar. Smaller, targeted appreciation events for clients and prospects are another part of our strategy.

Do you face any frequently occurring retirement-planning mistakes with prospects?

The two most common retirement planning mistakes I see with prospects are that they either take much more risk than their unique set of circumstances mandates or they wait too long to seek professional help.

Very few situations are irreversible. I try to impart hope and instill confidence that it will all be okay once we develop a plan that lets us see where we stand and can serve as a blueprint for getting back to what is and is not within our control.

What challenges do you face when modeling clients’ retirement incomes and cash flows, and how do you resolve them?

Clients ask me, with interest rates and yields where they are, how will their accounts generate enough income to provide what they want to spend? The answer is not necessarily in the income the account is generating presently, but in keeping six to 12 months’ worth of cash reserves on hand to meet monthly retirement spending demands.

It is common for clients to consider only current income and overlook the possibility of investment appreciation and/or the option of selling investments, at a gain or even at a loss (to offset potential gains), so as to generate the funds necessary to meet cash outflow demands.

What mix of products and solutions do you use most often and why?

While we offer solutions that take into account our clients’ individual needs, we primarily use individual securities: company equities and preferreds, as well as corporate and municipal bonds.

Once we’ve identified what it will take to accomplish our clients’ individual goals, based on what the prevailing interest rates are with respect to high quality bonds, we can determine the right mix of equities to supplement the bonds, so as to position the client to achieve their goals while minimizing their overall risk.


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