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Retirement Planning > Saving for Retirement

How to Handle Clients Who Lose Jobs in the Pandemic

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After Tammy McKennon graduated from the University of Missouri with a degree in finance in 1983, she went to work for Merrill Lynch as an advisor doing cold calls, which she describes as “a cubby hole and a phone book.”

McKennon is now an advisor with Edward Jones in Orange County, California, and remembers one phone call in particular.

“I spoke to this gentleman and gave him a presentation on a financial opportunity, and at the end of the conversation he thanked me. Then he said that although the investment sounded like it had merit, he would never do business with a woman concerning money,” she recalls.

“I was shocked. I wasn’t sure how to reply to that, but I remember that I [felt] pity for his wife,” the advisor says.

McKennon believes the financial advisory business is perfect for women and ideal for building a business.

“Women like working with other women,” she explained. “And women actually have an advantage in this field for a number of reasons: They are better listeners, they have empathy, and they really want to make a different in people’s lives. Plus, they have the emotional intelligence.”

McKennon left Merrill Lynch after eight years and took a break to raise her three children.

Once the eldest went off to college and the other two were in high school and playing sports until 6 p.m., “I had the days to myself, and it gave me the opportunity to start and build a business,” she said. “It also gave me the ability to have a life and do what I loved” once they were all away at college.

That effort has paid off, as today her business is thriving. Further, all three of her kids followed her lead and were finance majors.

In fact, her youngest daughter, who went to the University of California-Berkeley, “saw how I was able to build my business and even get back into the worst [low employment] workforce of 2009. She really values the work-life balance I’ve been able to establish.”

Here are more highlights from our conversation:

THINKADVISOR:  What issues are your clients facing today?

I have a client who is 63 years old and worked for a Fortune 500 corporation. [Because of the pandemic,] the firm announced they would be offering voluntary retirement packages, and said if they aren’t taken, another option could be an involuntary retirement scenario.

He is married, has no children, and planned to retire at 65. Upon this announcement, he came to me, since his company gave him two weeks to decide and he wanted to make an informed decision.

His spouse [who I hadn’t met but did have a job] came with him, and we spent time looking at the full picture of their household  spending, their desired lifestyle and retirement, and planning for future health care costs.

Edward Jones gives me the tools that helped me examine his situation and illustrate different scenarios to help them make an informed decision for their future.

He decided to take the early retirement. He wanted to be in control, as he wasn’t sure what the involuntary package would look like.

Because of our planning and working together for so many years, he knew he would be OK with an early retirement, and … could put off taking Social Security until he gets maximum benefits at age 70.

Are clients pulling money out of their retirement savings?

I’ve actually seen some people who are more proactive and doubling the amount that they’ve been automatically investing monthly because they’ve seen extreme volatility [before]. They remember 2008-2009 and see where their [accounts] are today. …

However, I do have a young client who has a family member who she wants to help during the pandemic and took money out of her company retirement savings. She knows it’s wrong but has a family member in distress.

She knows she’ll have to work longer — people aren’t oblivious to the costs.

What advice would you give young advisors?

We [older] advisors have a lot of experience to draw on from on highly volatile market environments. And my job as an advisor, like all advisors, is to help clients avoid making emotional, short-term decisions that could negatively impact their long term goals.

I met with clients virtually and explained how — if they were to move to cash and no longer have those monies available to be earning a stated rate of return through their life expectancy — that would impact their net worth and their ability to sustain themselves through retirement.

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