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How to Become a Retirement Advisor

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Securities America advisor Bill Kantner had the kind of problem most advisors only dream of: 90 prospects — all of them retiring Verizon employees – were ready to move into the next next phase of life. He needed a way to support their needs, and his firm had it — a program aptly called NextPhase, an income distribution strategy that includes an income guarantee.

Zachary Parker of Securities AmericaZachary Parker (left), Securities America’s first vice president of annuities and insurance, got his team to quickly supply Kantner with 90 proposals. The pitches were effective. Kantner converted 60 prospects into clients, with a combined $30 million in assets.

But the home-office support for Kantner, based in Chadds Ford, Pa., didn’t end there. Securities America fielded an average of one call a day from Kantner’s office for a month, then the pace slowed to one every other day, Parker told AdvisorOne in an interview. The calls eventually stopped coming as Kantner’s team mastered the system. But Parker’s office still gets 30 to 40 calls a week from the nearly 350 other advisors enrolled in the plan.

Parker, an affable native Nebraskan who has worked at the Omaha-area firm for six years, believes in the efficacy of NextPhase and has set a goal of seeing assets rise to $1 billion by next fall — an ambitious target around double current asset levels.

The enthusiasm stems from the benefits NextPhase offers clients and advisors alike, but importantly because of the support Securities America is offering around the program.

NextPhase uses a time-segmented approach — colloquially referred to as a buckets approach — in which funds needed in the near-term are guaranteed, funds needed in the medium term are invested conservatively, while funds needed decades later are aggressively invested. Five or six asset pools are thus allocated into investments moving at different speeds, with a final pool targeted to the client’s legacy objectives.

For clients, the program mitigates the greater risk of portfolio depletion inherent in the systematic withdrawal approach. Parker cites a MetLife study that shows 43% of consumers near retirement age believe they can withdraw 10% of their portfolio a year.

That kind of unrealistic expectation is bound to unnerve clients seeing their assets dwindle and stalwart advisors who press on the brake pedal may not seem like heroes to their clients. NextPhase’s time-segmentation thus offers advisors and clients alike greater discipline up front and smoother relationship dynamics.

There’s a psychological benefit too, in that the program eases retiree worries about outliving their income by guaranteeing a portion of the portfolio. At the same time, dividing the portfolio into different segments addresses the client’s portfolio growth ambitions and legacy desires.

For advisors, the benefits go beyond more relaxed clients, but help on the portfolio management side as well, since the system notifies advisors when to take action to reallocate the buckets. Moreover, Parker, considered an industry thought leader in the field of retirement income, sees a potential liability risk for advisors using systematic withdrawals in the event that clients run out of money.

NextPhase advisors also get extra investment management assistance in the program’s questionnaires, which don’t merely assess risk tolerance but also help clients identify their need for income guarantees, for which fixed or variable annuities are used.

Beyond the program’s investment and psychological benefits, it is the business advantage the program offers advisors that fuels Parker’s billion-dollar goal for NextPhase. In a down economy, retirement advice is one of the few areas that is clearly in growth mode, and NextPhase is designed to capture that demographic opportunity.

To get clients in the door, Parker has overseen the creation of 10 FINRA-approved marketing letters, and created a content-rich website replete with video presentation and interactive tools that can serve as the advisor’s website. The program also generates client proposals. The next step is to implement the marketing campaign by converting a 2-minute video into a 30-second spot and testing the promotional materials in a local market.

While it is common among broker-dealers to charge a fee for participation in their more comprehensive programs, NextPhase is offered at no cost to advisors with $250,000 in gross dealer concession. “Our goal is to help them grow their business,” Parker says, noting that the BD prospers when its advisors do.

Securities America also offers a 12-week coaching program to prep advisors seeking to develop a specialty in income distribution. Acknowledging that advisors too often forget or fail to implement ideas learned in training, Parker makes clear to trainees what practices he says they must adopt to succeed as retirement advisors.


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