1 on 1 Help!

This is what we do at PlanVision – it is kind of important to our whole business model.  It’s the energy of our firm – helping regular people in the middle class on a one-on-one basis.  We do it in 1 minute increments, or in hour long sessions, whatever it takes, wherever and whenever our clients want (well, within reason). Why and how do we do it?  Because we know it works – and what else would we do!

Rick Ferri wrote very well about the continued role and importance of personal assistance in the financial services industry here. These are the principles that have helped shape how we provide guidance to our clients:

1)  Financial planning, and advising, can be simplified for almost everyone.  It does not need to be some mysterious process that can only be known to industry insiders.

2) People do not necessarily need to meet with an advisor regularly to review their financial stuff – see point 3! Some people like that, it helps them feel more comfortable about what they are doing, but for many people it is just not necessary.

3) For most, simply having an advisor available for a quick call or meeting to bounce an idea off of, get a second opinion, or clarify a question or concern is more important than an account review.

4) Seminars at work, or provided by advisory firms in public, can be a good way to supplement personal meetings.  However, they have serious limitations and are far less effective than 1 on 1 guidance, for all these reasons.  Besides, almost all advisors use seminars for business growth.  They are fishing for clients – so be wary of the content at these events.

5) People learn when they are ready – when it fits into their life or an event forces them to learn more.  We do not provide guidance on our terms – we are available when they want to start.

6) People want to know how investments and financial planning affect their situation – not just in theory. How does this stuff impact me and what do I need to do about it?

7) Generally speaking, people learn about this stuff incrementally.  Lengthy meetings that review several topics are not as effective, we believe, as a series of shorter interactions which all build upon prior information.

8) Regardless of where they are in life, people start at different points when it comes to their understanding of investments and financial matters – so we begin our work at their starting point.  We never assume anything about our clients’ level of understanding.

9) While some people will actually read retirement plan or investment materials, most people don’t, regardless of how well written.

10) On-line retirement calculators and tools, while somewhat useful, have a low adoption rate. And in our view, they do not explain the built-in assumptions and risks in modeling, do not account for all of the variables that can affect someone’s future, and do not provide much interpretation – people have difficulty putting context on the results.

11) Advisors should charge, in almost all cases, a flat fee for their service.  They should be able to gauge how much time it will take to provide this level of guidance to a plan sponsor.  Charging on a percentage of assets can affect their recommendations, as will generating commissions or referral fees.

12) Almost everyone likes personal guidance when they enroll in a plan.  This event should take anywhere from 10 minutes to 25 minutes depending upon an employee’s experience and the mechanics of the enrollment process.  It will involve a quick review of the plan, an explanation of the investments and fees, an idea of the client’s experience with retirement plans and investments, the actual process of completing the enrollment, and some suggestions or recommendations on investments that make the most sense for their situation.

13) Finally, there are many people who simply have no interest in learning more about their investments and their plan.  They just want to be told what to do.  They may or may not even want to know the rational for recommendations.  However, if they can receive good guidance that does not take advantage of their situation, they could end up ok.


Why should you know about Ken Dychtwald and AgeWave?

I would like to believe that I am not prone to unnecessary superlatives – either personally or professionally.  So I do not think this is one.  Ken Dychtwald’s work is awesome!  I was first exposed to Ken’s work about 10 years ago.  His firm, AgeWave, was providing data to the financial services firm I worked for at the time. Ken subsequently spoke at a conference that I attended.

As a speaker, he is fantastic.  His content is compelling and he sprinkles in good humor along with emotion.  I find his commentary to be very impactful.  Broadly speaking, his work is on how our increased longevity, which is a newer development in the lengthy timeline of civilization, is changing our expectations for what is possible during our lifetimes.  It is altering our view of relationships, the role of work in our lives, how differently we develop and support our families, how we can see our futures, etc…

He also discusses the many different impacts of the Baby Boomer generation on our society – its role in shaping our values and commercialization, etc…  Ken’s work and presentations have certainly influenced my personal plans in addition to how I provide guidance to my clients.   To be clear, I find his insights and the information produced by Agewave to be more valuable in a professional capacity than any information that I have received from the financial services industry!

Here is a great talk from Ken delivered in 2013 at the American Society on Aging – the link is to the video page on the PlanVision site.  Definitely carve out 45 minutes to watch out – I don’t think you will be disappointed.  You can also go to AgeWave to learn more about their work.

You Need $3.2 Million to Retire!!

Believe it or not, this was the message that I heard from a financial advisor in 1996. He was presenting to employees at a non-profit in Minnetonka Minnesota.  His firm is one of the largest and most well-recognized financial advisory firms in the country.

Of course, his assumptions were preposterous – even though his presentation was slick and well-delivered.  Many brokers, advisors, and investment firms use unnecessarily frightening scenarios to promote their products.  I recall thinking how pointless it is to start saving if I need to get to $3.2 Million.  How many people in the middle class, not to mention employees of non-profits, are going to get close to $3.2 Million?  How about close to $1 Million?

Don’t get me wrong – of course people should save and plan for their future.  That is definitely prudent.  This is what I help people do all the time!  But what do YOU need to retire?

Well I have good news.  In my experience, and I have done hundreds of retirement plans for members of the middle and lower economic classes, people can enjoy their mature years without having anywhere near $1 Million.  Circumstances vary dramatically from person to person and much depends upon your debt, expenses, and flexibility.  In addition, many people are integrating work into their plans to fill in the gaps.  So relax a bit – do your best to focus on what you control and ignore many of the ridiculous claims about how much you need to accumulate.

A Company Where the Median Age of its Employees is 73!

This is a wonderful story about a company called VitaNeedle in Massachussetts. Click the link to go the company site.  There you you will find links to several articles on these incredible employees.  Would you be ready to work into your 100’s?  I find their work ethic and attitude to be inspiring!

In another story, BMW has redesigned one of its plants to accommodate an aging workforce and has actually improved efficiency. And the countries of Norway and Finland have restructured their national pension systems and employer incentive programs to promote the hiring of senior employees. Working into your senior years may not be in the cards for you, and it is desirable to have control over whether or not you have to work, but this is clearly where we are headed.