What worries advisers as we enter 2012

Nov 25, 2011 @ 12:01 am

With forecasters projecting slower U.S. economic growth and higher unemployment next year, not to mention a very wobbly world economy, I decided to check in with some financial advisers.

I wanted to find out what concerns them, as well as what's on their clients' minds as we head into the new year.

“The biggest fear my clients have is running out of money in retirement,” said Beth Blecker, chief executive of Eastern Planning Inc.

“With long-term goals and planning, it has been our job to help our clients overcome that fear, or at least manage it,” she said. “Now, however, our clients are bombarded with bad news on a consistent basis, so that fear is growing.”

Ms. Blecker said that her clients are concerned about political uncertainty in this country, the European debt crisis and market volatility.

It is for those reasons that she said her biggest concern going into next year is being able to help her clients maintain their long-term focus and avoid basing their entire financial futures on fear and emotion.

“As usual, I am concerned about the unlikely "fat tail' events that surprise us,” said Barry Glassman, president of Glassman Wealth Services LLC.

“Heading into the New Year, [such an event could be a confidence-building change that] looks something like Congress forming a grand compromise, China adjusting its currency [while] at the same time investing in European bonds, [and] U.S. companies spending their cash on hiring and fat dividends,” he said.

In other words, Mr. Glassman said that he is concerned that his clients are underweighted in stocks.

Thomas Reynolds, co-managing director at CRA Financial Services LLC, said his main concern is the European debt crisis.

“I really do not see an orderly unwinding there,” he said. “In the end, all of the European Union countries are worried about their own problems and really don't want to support the union.”

Mr. Reynolds' co-managing director, his brother Matthew, said they are concerned about Europe's slipping into recession.

“The question is whether or not the U.S. can avoid being pulled into that,” Thomas Reynolds said.

“The other thing I am worried about is the presidential election,” he said. “President Obama has a real chance of being re-elected, more so by default since the Republicans have not really brought forward a compelling candidate. Obama will see re-election as a validation of his policies, and government getting bigger scares me and our clients.”

“Our clients are focused on capital preservation,” Matthew Reynolds said. “They are concerned about minimizing risk, not so much maximizing returns.”

A majority of Kathleen Rehl's clients are concerned about health care costs, specifically any mention of cutbacks in Medicare benefits.

Others are concerned that slow economic growth will mean having to work longer and not being able to retire as planned. Still, other clients of Ms. Rehl, owner of Rehl Financial Advisors, are looking at the international markets and questioning the ability of European governments and the U.S. government to stabilize the markets and the global economy.

Despite all the economic gloom and doom, she said that her focus going into the New Year remains the same as it is right now: helping her clients the best way possible.

“Obviously, there's much going on in the world and in our country that merits attention. However, I don't have much impact or influence in those areas,” Ms. Rehl said.

“What I am focusing my attention on is helping where I do have the ability to make a difference. So I want to engage my energy, attention and efforts where I can make a difference — helping my clients,” Ms. Rehl said.

After speaking with the advisers, I hoped most took psychology classes in college, which might help them help their clients through these tough times.

Jim Pavia is the editor of -InvestmentNews.

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