Advisor of the Year winner Jeff Bucher talks prospecting, dealing with the DOL and predictions for the industry. (Photo: Michael Nemeth)

Retirement always intrigued Jeff Bucher because he watched many in his family navigate their golden years. He noticed that some had no worries and some struggled financially. His great-grandfather and great-grandmother lived the retirement journey many strive for.

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His great-grandfather lived to the age of 101 and was active throughout. He planned his retirement wisely and was able to live freely and give to others the entire time. This — along with a conference visit several years ago — inspired Jeff to assist others on their journey so they could enjoy the spoils of their hard work like he did. 

“The Senior Market Expo several years ago was a major turning point for me as I learned for the first time there was much more that could be done to serve our clients and I could do so without being tied to the company I was working for,” Bucher said. “I decided I could do more for my clients than what I was providing in my current position and take the leap of faith to start my own firm.”  

In 2006, Jeff convinced his brother Kevin to quit his high school teaching position and start Citizen Advisory Group. They became a full service firm handling what they call the six checkpoints of retirement (income, investments, tax planning, health care, long-term care and legacy planning).

Calling it an early success would be an understatement. In 2015 Citizen Advisory Group earned total sales of close to $32 million.

 

Here are some insights from Bucher, this year’s Advisor of the Year.

Question: What challenges have you faced or do you currently face in your practice?
Answer: When I first founded my firm, new client acquisition was always a challenge. We found a lot of success through workshop marketing, to the point where referrals and workshop marketing have become the cornerstone of our prospecting today. However, in an industry where new policies, regulations and laws seem to arise more often than not, prospecting remains a challenge for any firm. As a firm, it is important that we stay at the cutting edge of all marketing techniques so that we can stay top of mind with our ideal client.

The DOL’s recent regulatory changes also bring new challenges, especially with limited information available. As retirement advisors who are also investment advisor representatives, our team already adheres to the fiduciary standard, so putting client’s interests first is not new to us, but with some of these changes, I believe there’s going to be a lot of different products and companies that may exit the market, which could ultimately make it increasingly more difficult to serve our clients in the best way possible. However, I look at the regulatory environment and the changes as a positive because many firms may decide to go in different directions. New advisors may exit the business because they don’t have the firm established yet. Older advisors may retire. The fiduciary standard could be an opportunity for retirement advisors who do follow the fiduciary standard to serve more people. 

Question: What is your process in terms of prospecting and integrating new clients?
Answer: We believe that education is truly imperative, especially as investors approach retirement and their investment needs change. Many advisors only handle one or two areas of a client’s retirement plan, but we believe in order to best serve our clients, we must assist them with all of the financial areas of retirement and create one comprehensive plan. We also think this is how you are truly a fiduciary to your clients, as advising on all areas and how they impact each other allows you to provide the best possible advice. That is why our prospecting is educationally based around all of aspects of retirement planning. At our workshops, prospects go through six checkpoints of retirement, learning not just about investment and retirement planning strategies, but also about the importance of health care and Medicare, long-term care, tax and estate planning and the role each plays in a successful retirement plan. By the end of the workshop, many referrals are ready to set up their first appointment with our firm.

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As far as integrating new clients, our appointment process is completely plan driven. Since the workshops help layout the different checkpoints of retirement planning, the first appointment is spent going through the client’s goals and objectives and understanding the retirement journey they want to take. By gathering this information and understanding how the client envisions their retirement, we are able to build a plan that is not product focused but instead plan focused. This comprehensive plan helps them to see the big picture and understand what each of their investments and each of their decisions are doing and how that impacts the outcome of their overall comprehensive plan. Once a plan is built and implemented, our clients feel peace of mind that all areas have been addressed, and they feel empowered to go out and enjoy what they have worked so hard for their entire lives.

Question: What challenges do the senior and boomer markets face today?
Answer: I think the largest risk that retirees face today is longevity, because longevity increases every other risk in retirement. Baby boomers are different than the generations before them, many of them without pensions or guaranteed income sources. This, combined with the reality that life expectancies are continuing to grow longer creates an uphill battle for many baby boomers. The longer we live, the more challenges we will see, including extreme stock market volatility and even crashes, inflation, health issues and rising taxes. If a retiree does not address longevity first, the rest of their lives they’ll be on pins and needles hoping that they have enough money to survive.

The other big issue that I see with today’s retirees is the low interest rate environment. Many investors become more conservative as they approach retirement, turning to “safer” investment vehicles such as CDs, bonds or annuities. However, all of these safe types of investment vehicles are impacted by the low rate environment, which makes accumulating enough for retirement increasingly more difficult, especially if we have a long life. Portfolio growth is key, but another risk that they could face, if dissatisfied with the returns of those safer alternatives, is overextending themselves in the stock market in an attempt to make more money. This usually doesn’t end well and could prove very fatal to the overall success of their retirement plan.

Question: What are your predictions for the industry over the next 10 years?
Answer: I think we will see very interesting changes in the financial services industry over the next 10 years. The shift in demographics will be one factor. We have the baby boomer generation that is now in retirement, and another big group is coming behind them. They too will have their own unique challenges and many of them are going to need the assistance of a financial advisor to navigate this challenging journey they’re about to take. Those demographics also pertain to advisors as many advisors are going to be exiting the business as they retire, providing a lot of opportunity for younger or new advisors. The need for advice will remain high, but between the changes in demographics, as well as legislation, the amount of advisors to serve those needs could potentially decrease.

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I also think that the future of compensation for advisors is going to change. We’re already seeing that with the DOL’s fiduciary rule. Upfront commissions are going to start going away, in my opinion, and a more trail or fee-based compensation structure will likely be prevalent in the future. This change, for a firm that’s established like ours, is not as troubling as it would be for someone new coming into the business. I think it’s going to be much more challenging for someone to start a firm going forward because without upfront commissions, it’s going to be more difficult to have the amount of cash flow necessary to get started. This could potentially shift power within the investment world to the larger firms that can afford to hire because they have the cash flow, and detour a lot of could-be independent advisors from going out on their own. At our firm we think that the changes in compensation and the changes that we’re going to see are going to benefit a firm like us, but certainly could have drastic impact on firms that are set up differently, especially those that may be insurance only or transaction type of operations that are geared towards — and rely more on — up-front commission.

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Question: Have you changed the way you do busines or do you have plans to make changes in light of regulatory changes?
Answer: We have certainly evolved with continuing education, new products, new ideas… but our process has remained steady since the onset. As I mentioned earlier, we have a six checkpoint system that is designed to eliminate the risks of retirement while enhancing quality of life and the retirement journey. For us, it’s never about the “sale” but rather the plan — and each client’s plan accounts for their current situation, needs in retirement, risks they’re facing… every detail is documented and archived so if a need ever arises, we can always reference back to determine why we did what we did as part of their plan. Due to our licensing, we were already fiduciaries to our clients. Combining this with being independent allows us to offer the best of class as far as products and solutions. 

In terms of the recent announcements from the DOL, the biggest impact I see to advisors in the retirement market will be the change in compensation structure. We identified this as being a possibility from the DOL a while ago, and have been slowly transitioning to a trail commission structure. We have adapted to this and will be able to thrive in a new regulatory environment as a result, but a lot of advisors who haven’t adapted yet may not be able to afford to stay in business, or at least not “business as usual.”

Another aspect that the DOL rule will change is the way clients seek and receive advice, so an advisor will need to make sure they are giving each client the best advice possible, or they simply will not do business with you. Ultimately, you need to create value for clients, or you will be replaced with less expensive software or services. We truly believe that with the advent of robo advisors — and all other areas where someone could get less expensive advice — could be a new challenge. That is why having a comprehensive system is not only going to be a requirement, but it is going to be vital to retaining clients and capturing new ones. If advisors are just about selling product, they are going to lose as baby boomers are tech savvy enough to go online and buy a product for themselves. Creating extreme value in the retirement planning process is what clients look for now and is what is needed to distinguish oneself. 

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