Nix the Mixed Emotions About Retirement

cook_headshotPaul Cook, AIF®, Vice President and Regional Director, Retirement Plan Services

The future holds many uncertainties, leaving us to often have mixed feelings when thinking about retirement. Even if you feel more than ready, on an emotional level, to move to the next phase of your life, you may have some uncertainty about whether you will be able to maintain the lifestyle you wish.

Last week in Roddy Marino’s Eight Signs You Are Ready to Retire, he shared some useful statistics from an Ameriprise Financial survey that address this notion of mixed emotion. Close to 50% of respondents felt they were ready to retire, but admitted that there was still some concern. 21% admitted more bluntly that they felt uncertain or not ready at all. Suffice it to say that a large portion, about 63%, of newly retired boomers said they felt stressed about retirement leading up to the decision.[1]

We’ve talked before about how your physical health can impact your retirement, but let’s take another approach and look at six financial certainties that may help to lower your stress and avoid some of the mixed emotions about retirement.

  1. You will need cash. Throughout your retirement journey, you will need quick access to your money. Typically, you will need enough liquidity to cover two years’ worth of anticipated living expenses.
  1. The quicker you spend, the shorter it will last. Your predictable expenses may total up to, for example, $2,000 a month. But how many years could you go on spending $24,000? The impact of spending on your portfolio becomes clear once you determine a spend-rate. For example, if you had $500,000 in a retirement savings account and withdrew $2,000 a month, the portfolio would last 20-29 years. A $500 reduction in spending, however, could result in 9-15 more years of longevity for the portfolio.
  1. The money not needed to cover expenses must be invested…wisely. While you can’t control the markets, you should feel confident that your investments are managed with skill and integrity. Choose an investment advisor with whom you have a trust and have a high level of confidence.
  1. Eventually, you will run out of cash and need more. One of the tricky parts of managing your money in retirement involves knowing how to create an income stream from your portfolio. You need to figure out which assets to take distributions from, and when. To ensure that each of your assets performs optimally, you must conduct a careful technical analysis and evaluate moving market trends. If you are like most retirees, you could benefit from having an expert perform this service for you so that you can have confidence that you are benefiting from all possible market and tax advantages.
  1. You’ll make more confident decisions if you know how your investment performance and expenses measure against your goals. Throughout your retirement journey, it is helpful to know where you stand against your goals. If your overall goal is to outlive your savings, then you should have a system in place that helps you contextualize your spending and its relative impact on long-term goals.
  1. Markets are volatile. When markets fluctuate, many investors feel like all semblance of control over their financial future is lost. Having a well-diversified portfolio may help to smooth the ride and reduce some of the emotions of investing.

If you approach retirement by developing an income solution that addresses each of these known facts, you can feel as if you are on more solid ground to enjoy your retirement.

The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Holdings are subject to change. Brinker Capital, Inc., a Registered Investment Advisor.


[1] Ameriprise Study: First Wave of Baby Boomers Say Health and Emotional Preparation are Keys to a Successful Retirement, February 3, 2015

Even in our Frenzied Industry, Shakespeare’s Voice Shines Through

Noreen D. BeamanNoreen D. Beaman, Chief Executive Officer, Brinker Capital

If you’re like me, then you have spent the last few weeks forcing helping your high schooler with his or her summer reading. In doing so, I came across a Shakespeare quote I haven’t seen in a few years, yet seemed apropos to the current climate of our industry—“Cry ‘Havoc!’ and let slip the dogs of war.” (Bonus points if you can name the play this quote is from).

The phrase itself characterizes victorious soldiers seeking spoils from a fallen foe. While poignant, advisors in the throes of the Curian aftermath are feeling like they are on the wrong side of the leash!

At Brinker Capital, I felt the foremost action our team needed to take was to be available to support financial advisors and their clients. Not to hit them over the head with how great we are, but to talk with them and understand how Curian’s offering benefited them and the goals of their clients.  We knew Curian had an impactful offering and sales culture, but we wanted to dig deeper. Our recent hire of Greg Verfaillie confirmed what we already believe at Brinker Capital.  As he expressed in his interview in RIABiz, “In the conversations I’ve been having with advisors, it’s clear this decision is not going to be made on product or platform; it’s about the relationship.”

Greg has given us insight into what attracted advisors to his former firm, the type of support that they found meaningful and what partnership means to them.  This has guided us in effectively providing the right portfolio alternative, strategically communicating so advisors can convey the right message to their clients, and most importantly, being respectful of the process they are engaging in when seeking a successor firm for their clients’ assets.

With our 28-year history and our dedication to understanding the needs of advisors, we are ready to help provide solid support and smooth transitions throughout this frenzied process. After all, as our aforementioned poet once said, “Experience is the teacher of all things.”

The views expressed are those of Brinker Capital and are for informational purposes only. Brinker Capital, Inc., a Registered Investment Advisor.

A Reliable Partner Dedicated to Delivering Better Outcomes for Advisors and Investors

Widger 4_v2Charles Widger, Founder & Executive Chairman

By now, many of you are aware of Curian Capital’s decision to exit the fee-based business to focus on the core activities of Jackson National Life Insurance Company.  I am sure there are many strong, global, corporate considerations that led them to this determination; nonetheless, it does not alleviate the disruption to impacted financial advisors and investors.

This situation reminds me of the motivations that led me to create Brinker Capital 28 years ago.  When our original parent company, Mutual Benefit, floundered in 1991, it was part of an unfortunate reoccurrence taking place in the financial service industry.  Venerable names like E.F. Hutton, Kidder Peabody and Prudential Bache were also falling by the wayside.  I was determined to make Brinker Capital different.

That is why I built an organization with the laser focus of helping advisors and investors succeed by delivering a premier investment experience that would allow them to achieve the outcomes that they were seeking.  I surrounded myself with professionals who were committed to this same vision, and I’m proud that six of the eight founders are still here today and further, that over 40% percent of my employees have been here for over 10 years.

Brinker Capital is 100% employee-owned. That has allowed us to make thoughtful, long-range decisions without outside ownership staring over our shoulder.  We are proud of our independence and will continue to be independent. Independence empowers Brinker Capital to continue to build this great organization that for 28 years has, and always will, put the advisor and investor first.

I, along with my colleagues, will continue to provide the best in investment management and advisor support.

For more information, please click here to read our latest press release.

Brinker Capital, Inc., a Registered Investment Advisor

Introducing the New BrinkerCapital.com Website

Sean ForcineSean Forcine, Interactive Media Manager

As the interactive media manager at Brinker Capital, I’ve witnessed the evolution of our business, brand and culture for the better part of a decade. The industry and the world around us has of course evolved as well. Smartphones, tablets, mobile apps, social networks and so many other advancements have dramatically changed the way we access and share ideas and information. That’s why Brinker Capital is continuously looking at how we can best reach our community of financial advisors and investors. With this philosophy in mind, I am pleased to announce our latest enhancement—the NEW BrinkerCapital.com website.

Our new website has been completely redesigned, giving it a more user-friendly layout and interface. Less text, more white space, and more images and videos are just a few of the features that make the website more aesthetically pleasing and easier to digest the content we share.

Some of the other enhancements to BrinkerCapital.com include:

  • Greater access to content on our products and services
  • A centralized Resource Center housing all of our marketing materials
  • More investor-facing materials for advisors to share with their clients
  • Mobile access from any smartphone or tablet
  • Seamless access to the Brinker Blog and social media networks
  • Deeper insight into the Brinker Capital culture

BrinkerCapital.com was a labor of love for the past two years—and we did it with the direct help of our advisors. We wanted to know what content advisors across the industry wanted to see and how they wanted to access it, so all of these changes were designed with the advisor and investor in mind.

I could certainly go on, but I invite you to visit the new BrinkerCapital.com and experience the improvements for yourself. We would love to hear your feedback, so in keeping with the spirit of why we designed the website, please let us know what you think, positive or negative, or offer suggested enhancements by emailing me at sforcine@brinkercapital.com. I look forward to hearing from you.

Embracing Innovation: Envestnet Advisor Summit Wrap-up

VradenburgGreg Vradenburg, Managing Director, Investment Services

Last week we were honored to be one of the Premier Sponsors at the Envestnet Advisor Summit in Chicago. The theme of the event was “the next big thing” and it was evident everywhere. Envestnet Chairman and CEO Judson Bergman opened up the conference by talking about how advisors need to be disruptive innovators in order to succeed and overcome looming industry challenges. He stressed the importance of embracing technology, building brand and perfecting marketing and reminded us of past giants such as MySpace, BlackBerry and Blockbuster that did not take these steps and were not aware of happenings in the new markets and seemingly fell behind.

Envestnet President Bill Crager also talked about how the role of the advisor will become increasingly important in the next five years. As older advisors begin to exit the business, Crager projects that the average advisors assets will increase from $90 million today to $145 million in 2020. (Source: “9 Takeaways from the Envestnet Advisor Summit”, Financial Planning, May 20, 2014)

Conference attendees were also introduced to the Envestnet Institute, an online advisor education portal that features white paper, videos and webinars. Brinker Capital is proud to be one of the contributing content partners for this exciting new unified education portal.

Finally we were pleased by the informative “Liquid Alternatives Panel” that our CIO, Bill Miller, participated in. All panelists agreed the education around alternatives is key for both clients and advisors. Alternatives firmly fill a role in a portfolio by providing greater portfolio diversification as well as access to unique opportunities and strategies; however, they are just a piece of the overall pie.

Our thanks go out to Envestnet for hosting such a great event that allowed us to network with colleagues, investment professionals and Envestnet representatives! We look forward to next year’s Advisor Summit!

Applying Behavioral Finance To Investment Process Crucial To Financial Advisors, Brinker Barometer Finds

Earlier this week, the results of our latest Brinker Barometer advisor survey were made public. Click here to read the full press release. This particular Barometer had a focus on aspects of behavioral finance and how advisors gauge progress towards meeting their clients’ financial goals.

Check out some of the most interesting survey results in the infographic below!

1Q13BrinkerBarometer_5_14_13

Networking Events

Bev FlaxingtonBev Flaxington, The Collaborative

Advisors looking for ways to add value to their clients will often hold educational events. Most advisors see this as a chance for increasing satisfaction and retention, but also as a way to generate referrals. Educational events are a great way for the advisor to bring additional value to their clients.

Another option that isn’t as popular but can be extremely valuable to clients is to offer a peer networking event. In cases where your client base may include business owners, entrepreneurs, widowed or divorced women, or others with similar interests, an event set up purely for networking can give clients access to experts, information and connections. Let’s look at some best practices around doing this:

networking

(1)    Identify the themes in your client base. Do you have people who might like to meet one another, or could learn from one another? Are there clients looking for introductions in order to grow their business, or who need information in their work or philanthropic lives that another client might be able to help with? Look through your client base to see where one client could add value to another client. See what your clients struggle with in their own lives – work, hobby, charitable, etc. and whether there are opportunities to get like-minded, complementary people in the same room.

(2)    Set expectations that this is a peer networking event. Give some structure to the evening. You could have an introduction to the event, talk about the networking objectives, and perhaps introduce clients at the outset. One possibility would be to go around and have each client introduce him- or herself and talk about their area of interest for the event. What would they like to gain? Another option would be to have areas of focus set up in different spots within the room so people can choose where to go to talk to others. Or you could set it up using the “Speed Dating” format where people rotate and talk to one another for a few minutes to exchange cards and interests. You could even have a speaker who is expert in networking to share some tips and ideas about how best to network for greatest advantage, and then ask people to practice the new skills they have learned with one another.

(3)    Set a “theme” for the evening. This could be anything from “The Back Office of the Small Business Owner” to “Philanthropic Interests in Africa”. Find out what your clients are interested in, what issues they are struggling with, what information they have to share and then create the event around these things. You could find an outside expert or a client, or other trusted advisor such as an accountant or attorney to speak on a topic and then ask clients to talk about different opportunities or aspects related to their lives and situations. For example, if you have a number of entrepreneurs in your client base, you could have an evening on “Going from Start-Up to Structure” and have clients who work with these firms talk about what they offer for help.

(4)    Keep the dialogue away from investing. These events are an opportunity for your clients to learn more about what your other clients may be doing, or may have to offer. It’s a way to bring like-minded people together to learn from one another and to possibly leverage one another. The focus isn’t on the investment process or the markets, it’s on meeting the needs of your clients for information and connection.

See if your client base lends itself to peer networking opportunities. In this age of social media connections, the truth is that many people still struggle to find the “right”contacts they need to help them grow their businesses, change their lives and learn about opportunities. Your clients may prove useful to one another as you facilitate these introductions.

Dealing with Fear in Clients

Bev FlaxingtonBev Flaxington, The Collaborative

These are difficult economic times. Add the current economic climate to a market that hasn’t cooperated for some years, and you have investors with angst. Anyone with money saved, or looking at retirement, is feeling a bit worried and ill at ease. When investors are worried, it impacts the advisor. Sometimes a client will not make a decision out of fear. Sometimes referrals are impacted because clients hesitate to recommend friends and family until they see what happens with the markets. People often simply sit on the sidelines when they are fearful, because doing nothing always seems better than taking a risk.

Do advisors just have to wait out this period of angst? What if it doesn’t go away for some time? Are advisors doomed to live with fearful clients? Let’s look at some strategies for managing clients through fearful times, and perhaps even benefiting from the difficult conditions.

bev blog 12.13.12

(1)    Manage your own fears first. If you, as an advisor, are worried, this will impact your clients too. Remember, most of us recognize the “smell of fear.” We know when someone is scared or worried. If you aren’t managing your own reactions, it will be noticeable to your clients. Practice meditation or deep breathing. Go to the gym. Read books that make you laugh. Whatever you have to do to feel more upbeat and less worried, do it. And watch the way you speak. Your words should be balanced and realistic, but overall optimistic and connoting a sense of “in control” to your clients.

(2)    Stay proactive. Many of the fears come from the unknown. What will happen if our politicians can’t reach an agreement? What if they decide to do one thing over another? The news is filled with worst case scenarios. Stay on top of what’s being discussed, and provide education to your clients about what you will do in different scenarios. Show them you are paying attention and thinking about your responses based on different outcomes.

(3)    Provide education. This might be a great time to hold a client event or seminar on the things we do know about. Can you speak about long-term care? Can you talk about living well during the aging process? Can you examine 529’s and the college savings options? Find things that are more known and that may be impacting your clients now or in the future, and educate about them. Keep the focus on you and your expertise, while taking it off – even for a short time – the things that are distracting your clients.

(4)    Talk about the fear that clients and prospects have. Acknowledge that you are hearing about it from many people. Talk about how much having an advisor can put fears to rest. Instead of reading the paper every day and wondering what strategies they should take, your clients can depend on you to do this. It’s really the best time to have someone else looking out for them. Remind them of this whenever possible, and acknowledge the circumstances. You want to stay confident in your approach, but it can be helpful to let them know you understand their fears and concerns and that you are there to look out for them.

In many ways, times of uncertainty offer an opportunity for those who are confident and experienced in approach to be the beacon, or comfort, for worried investors. See what you can do to be that confident supporter during these interesting times.