Working super-high risk jobs, first responder police officers and firefighters are a fearless lot, to be sure. But in the coronavirus pandemic and accompanying financial mayhem, who is providing these courageous front-line employees with support and assurance for their own needs, especially about their hard-earned retirement savings?
At Serve & Protect Financial, founder Brian McGinnis, a retired 25-year cop, is helping first responder clients stand strong by reducing their stress over finances, as he tells ThinkAdvisor in an interview.
This client niche trusts him because, after all, he’s walked in their shoes. So has the firm’s co-founder, Wendy McGinnis, Brian’s wife, who put in 17 years as a police officer before her retirement.
An FA since 2011, when he opened his independent practice after retiring that year as a deputy sheriff on Florida’s west coast, McGinnis, 62, boasts a highly successful practice built firmly on the trust public safety employees place in him and his advisors, former first responders themselves.
Based in Tampa, the fee-based FA manages assets of about $200 million. Outside Tampa, he does substantial business in Miami, Palm Beach County, Fort Lauderdale and Texas; he has now expanded into Atlanta as well.
In the interview, McGinnis discusses a smart strategic move he made in a number of clients’ portfolios this past January, the effect of which “softened the blow” delivered by the fast and crushing market decline, he says.
Cops and firefighters retire young — age 51 — and have a high divorce rate. McGinnis, whose practice is about 90% retirement accounts, works with these clients to make the right critical retirement-planning choices. For example, the jumbo Florida State Retirement System allows them to choose between a pension and a 401(k) plan.
McGinnis, who started out at McDonnell Douglas (now Boeing) working on the top-secret U.S. Army Apache attack helicopter project, moved on to serving as a police officer for 25 years before fulfilling a longtime dream to step into financial services.
ThinkAdvisor recently interviewed the FA, speaking by phone from Tampa. He described first responders as “a temperamental group” who keep to themselves and deeply trust their own.
Here are excerpts from our interview:
THINKADVISOR: Why are you well suited to advise police officers and firefighters about their money?
BRIAN McGINNIS: First responders are a temperamental group. So there’s a trust factor in working with these clients. As cops or firefighters, we’ve walked in their footsteps. I put on a bulletproof vest for 25 years as a cop. My wife, Wendy [Serve & Protect co-founder], was a cop for 17 years. And several of my advisors are former public safety employees, too.
How have your first responder retirement clients reacted to the pandemic-generated market downturn?
The phone is blowing up with all the people who didn’t [go through the experience of] the [2008-2009] financial crisis. They’re saying, “Wow! My account went down $150,000.” So add that anxiety to going to work every day as a first responder and the regular stressors that go with it.
Are they fearful?
They’re not scared of going to work — but on top of all the other doom and gloom in their lives, it’s this one-off that’s scaring them. They’ve never dealt with it before, and they don’t know how to stop or fix it.
What do these clients want when they call?
They need to know that someone is watching their account and understands what’s happening. They want a bit of pressure taken off themselves. They want someone else to worry because they’ve got enough on their plates.
What do you tell them?
“Let me show you some of the patterns of the past. Do you know of any market downturn where there wasn’t a recovery? A black swan can happen. But black swan events recover.” You hit them with statistics in layman’s terms and be a really good listener.
Did you prepare your clients for a market downturn this year?
In January, we put 20% or 25% of equity positions into a conservative moderate portfolio. So we softened the blow. It had nothing to do with thinking that the coronavirus was coming. It was because this is a presidential election year, and it’s been proven statistically that there’s a lot of volatility in election years.
How did you broach that move with clients?
The market had been pretty solid. If our clients had a 14% or 15% return the previous 18 months, we lowered their expectations and went into a conservative play, mentioning that old saying, “Pigs get eaten; hogs get slaughtered.” In other words, we didn’t want to be overly aggressive.
With what did materialize as a giant decline, have any clients told you they want to go to cash?
Sure. We explain to them that if they’re not in the market, any time there’s a resurgence they won’t be getting that upside. We explain the cause and effect of any type of significant movement, such as going all to cash. But the answer always lies with the client.
Typically, what age are first responders when they retire?