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Retirement Planning > Retirement Investing

Wall St. on 9/11 and Future Crises; Innovative Philanthropy; Retirement’s Real Costs: September Research—Slideshow

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In September’s Research cover story (“Wall Street at War”), Senior Editor Ken Silber looks back at 9/11 and ahead to future crises. The financial industry acquitted itself well in the face of the terrorist attacks, helping stave off a feared economic and financial meltdown. But given the later mortgage crisis and the economy’s current state, the resilience the financial sector showed a decade ago cannot be taken for granted.

Annuity Analytics columnist Moshe Milevsky analyzes what retirement really costs. He finds that the approach taken by many financial advisors on retirement planning is prone to generate a false sense of security about clients’ assets.

Contributing Editor Ellen Uzelac examines the cutting edge of philanthropy, offering a list of concepts that are proving valuable in enabling clients to give intelligently.

Click through the following slides to preview other content in the September issue of Research.

Research September cover spreadWall Street at War

Al Qaeda’s choice of targets on 9/11 reflected a perceptive grasp of the relevance of finance to national power. The terrorist group aimed at crippling markets and institutions that ultimately bolster America’s military capability and political influence. Despite the spectacular and horrible effects of the attack, it was a gamble that would fail.

In this cover story, Research staffer Ken Silber looks at the resilience the financial sector displayed in response to the attack. This included financial firms’ adept transfers of operations to backup locations and the Fed’s swift policy response. In a sidebar, Silber highlights the heroic role of Rick Rescorla, Morgan Stanley’s security chief, who saved thousands of lives—and lost his own—evacuating the firm’s employees from the World Trade Center.

Silber discusses the changing perceptions of the financial industry in the wake of the later mortgage meltdown, and how future crises of various types could again test the industry’s endurance and adaptability.

Research September nest eggWhat Does Retirement Really Cost?

Professor Moshe Milevsky argues that a growing number of retirement planning “tools and philosophies’’ tend to give misleading results. Most problematically, they generate a false sense of security that prospective retirees have enough assets to meet their goals and needs, when in fact they don’t.

Milevsky walks readers through some tricky math in discussing various scenarios of investment returns and longevity. He shows how retirement planning software can produce deceptively soothing results, by downplaying very real possibilities that retirees will live longer and have less money than they expect.

Life annuities, Milevsky contends, are not just one more tool in the arsenal of retirement planning techniques. Rather, they provide a crucial market signal of real retirement expenses, and a safe way to convert a nest egg into a lifetime of secure income.

Research September philanthropyPhilanthropy’s Cutting Edge

Contributing Editor Ellen Uzelac notes that helping clients develop their philanthropic activities can be a complex undertaking. Many advisors are reluctant to delve into it, feeling it’s outside their bailiwick or they have little to offer. But as Southern California advisor Mitchell Kauffman argues, “there is value to be added.”

Uzelac provides a list of 10 methods that advisors should consider in helping their clients give intelligently. One such method is rethinking the private foundation by structuring philanthropic activity as a donor-advised fund. Such funds, contends Baruch Littman of the Jewish Community Foundation in Los Angeles, provide valuable flexibility and tax benefits.

Also on Uzelac’s list: the gifting of a life insurance policy; collaborations through peer funding networks and giving circles; reconsidering a foundation’s perpetual model in favor of a limited time horizon; and more.

Research September client relationshipUnderstanding Client Culture

Columnist Raphael Lapin explains how advisors can raise their level of service to clients by methodically examining four areas: communications preferences, values, decision-making processes and management styles.

Lapin draws on his work in dealing with people from a broad variety of cultures, but says that even in working with people of similar backgrounds, a focus on bridging “cultural” gaps can help deal with clients’ different attitudes.

For instance, people vary greatly in the means, frequency and content of communications they prefer to have with their advisors. Recognizing such differences aids advisors in satisfying existing clients and attracting new ones.

Research September global economyDeferred Liability

Global Economy columnist Alexei Bayer presents a sobering analysis of the national debt and how it ultimately will affect even high-net-worth individuals who have largely been insulated from the economy’s travails.

The rich, argues Bayer, need a stable and strong U.S. because no other country can perform the role of a global leader as successfully as the U.S. has done over the past 65 years. He notes that millionaires in the U.S. and abroad are heavily invested in U.S. dollars, shares and bonds. Billionaires around the world have homes and residency permits in the U.S. as an insurance policy against the loss of wealth and threat of physical harm.

A weak U.S. will take away that source of security, to the detriment of all, including the wealthy, Bayer argues, and suggests new tax policies are the answer.

Research September FeldhornAmerican Dream

Earl Feldhorn of Wedbush Securities has worked to improve the lives of thousands of clients and has prospered along the way. Jane Wollman Rusoff profiles the 72-year-old Vienna-born advisor, whose family fled the Nazis when he was an infant. Feldhorn discusses his family’s harrowing experiences, as well as visiting Dachau in later years.

Feldhorn has been an advisor at Los Angeles-based Wedbush for almost half a century. He is also noted for his philanthropy, having been very active in the Epilepsy Foundation and honored with chairs at several universities and medical centers.

“Earl is one of the most honest people I know,” says Sam Yellen, a retired accountant and a client of two decades. “He never asks anybody to invest in anything he doesn’t believe in. Everything is thought out and a good decision.”


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