IN’s Pavia: What’s on your radar?

When he was mayor of New York, Ed Koch often would ask constituents, “How am I doing?”
Taking a page from the mayor, I used the recent InvestmentNews Retirement Income Summit to ask attendees: “How are we doing?”
Having served as the editor of this publication for seven years, I have come to know that financial advisers aren’t a shy bunch. So I directly asked what they had learned at the conference.
“The best idea I got from the conference was how important long-term health care insurance will be to my clients,” said Mark Davids, vice president of wealth management at Dorion-Gray Retirement Planning Inc. “I always recommend purchasing it. However, I do not put enough emphasis on the chances one of my clients [will] actually need the coverage.”
Mr. Davids said that he also gained knowledge from the panel discussion with Robert Arnott, chairman of Research Affiliates LLC, and Dennis Stattman, managing director and senior portfolio manager of BlackRock Inc.’s Global Allocation Fund.
“What I gathered from their conversation is that no more than 30% of my clients’ retirement assets should be in equities,” Mr. Davids said.
I posed the “How are we doing?” question to attendee Keith Schmitt, a registered representative at Kelman-Lazarov Inc. Mr. Schmitt and I made acquaintances about 10 p.m. after the first day of the conference as we both found a quiet place at the hotel to enjoy a good cigar and a drink.
“My biggest takeaway from the summit was that experience is the best teacher, and there are not always new solutions to old problems,” Mr. Schmitt said.
He also said that the summit provided him with reaffirmation.
“The reaffirmation was that the hours we spend reading, researching and completing due diligence are what really separate great advisers from good ones,” Mr. Schmitt said.
He said after taking some time reviewing his notes, he realized that the statement that stood out most was made by Erin Botsford when she said, “I am product-agnostic.”
Ms. Botsford, president of The Botsford Group, was a panelist on a session called “Adviser to Adviser: Practical Applications of Annuities in Retirement Income Portfolios.”
“Erin was referencing variable annuities, but I felt that this was a powerful statement that could have very easily been overlooked,” Mr. Schmitt said. “Our industry continues to evolve, almost daily, and to truly be product-agnostic, you have to peel away your biases.”
As for implementing new ideas at his firm, he said that he has already made some calls and arranged meetings with local agents who specialize in long-term-care insurance.
“We feel that this trend will continue, and partnering with a specialist who we can leverage to increase our firm’s knowledge base is a priority,” Mr. Schmitt said.
Thomas West, who runs an eponymous financial services firm, said that he did some research on the variable annuity study presented at the summit by Peng Chen, president of Ibbotson Associates Inc.
“I expect to look qualitatively and quantitatively on how to better work variable annuities’ guaranteed-minimum-withdrawal benefits into the portfolios of our clients, specifically for cash flow needs in excess of 30 years,” Mr. West said.
Because of what he learned at the summit, he said that he is “now looking at variable annuity benefits conceptually as an alternate approach to hedge systemic risk, insofar as market risk is transferred to the insurance companies for the guaranteed-minimum-withdrawal benefits’ cash flow requirement.”
Mr. West also said that the presentation by Mary Beth Franklin, an editor at Kiplinger, reinforced the need to improve his own education on Social Security so he can help clients maximize their benefits.
As a planner for middle-income clients, Lazetta Rainey Braxton, a certified financial planner with Financial Fountains LLC, said that the LTC session was most informative. She was encouraged to hear panelist John Wheeler, executive vice president of Water Tower Financial Partners LLC, say that LTC insurance shouldn’t be viewed as an insurmountable expense.
Ms. Braxton said the session made her realize the importance of LTC coverage and that it should be a priority for discussion and analysis for clients, particularly those who are in the late stage of the accumulation phase and will enter the retirement phase within 10 years.
“Mr. Wheeler’s points will assist me in positioning LTC insurance with confidence to my clients,” she said.
If you attended the summit and you want to voice your opinion, just drop me an e-mail at [email protected].

Related Topics: Just Thinking