How advisers are guiding clients through critical crossroads

Advisers forced to go beyond numbers when faced with clients' concerns

For the third of a series of special reports on the Crossroads the financial advice business is facing, we asked the industry’s top advisers: How are you guiding clients through today’s critical crossroads? Here is what they said:

“Changes to the estate tax law at the beginning of 2013 mean that many individuals have an estate plan in place originally designed to solve a problem that no longer exists. Those dated plans in some cases actually create a new income tax problem their heirs will inherit when the plan is enacted. Those who haven’t revisited their plan — a critical part of any individual’s wealth transfer strategy — in the last year may be surprised to find what they planned for so carefully no longer serves their best interest.

Jim Cornfeld
Wealth adviser and chairman of the Advanced Planning Committee
Buckingham Asset Management

“More than ever we are seeing people deal with complexity and vulnerability! Complexity in the relationships we need to have to live the life we want; vulnerability by our need to rely on others to produce the things we need. This creates uncertainty which can bring out fear and doubt. The question we are hearing from clients is, ‘How do we live life in uncertainty without the fear and doubt?”

Marty Kurtz
Founder and president
The Planning Center

“One of the more interesting things I’ve been seeing lately is that interconnection with dementia. For me it’s a personal issue. I watched both my parents suffer with the disease. So I learned a lot from the inside: It’s taxing, the caregiving that’s involved. It’s a difficult thing for clients and children to talk about — who will be in charge of the finances — but those conversations have to happen. And as financial planners, we can help.”

Lee Baker
Financial planner
Apex Financial Services

“As women become the breadwinners in the family — 40% already are out-earning their husbands, and women under 30 are out-earning their male counterparts in all but 3 of the top 150 cities — they expect more advice on career planning and human capital growth, as well as more guidance on life insurance and retirement and corporate-benefit plans.”

Heather R. Ettinger
Managing partner
Fairport Asset Management

“We’ve had a number of clients’ parents pass away in the last year. Our client is usually the child that becomes the executor, and the amount of pitfalls they face during this event is mind-numbing. Many of the parents are still operating on ‘back of the napkin’ estate planning. As a result, we’ve begun to work with our clients to discuss their parents’ planning. Family meetings are key, if you can get the parent and siblings to participate. This then leads to the further discussions on how to do an even better job for [the client’s own] children, down the line.”

Doug Flynn
Partner and cofounder
Flynn Zito Capital Management

“We implement a [retirement] plan and everything goes along great until I get the phone call, ‘I need to get some extra money, can I?’ The inevitable changes come along: I want to help my child buy a home, I need to pay for a wedding, my college student is moving home, my elderly parents are sick and need our help, we want to remodel the kitchen — the list goes on. A solid retirement plan has to be adaptable, flexible and looked after.”

Julia M. Carlson
CEO and wealth adviser
Financial Freedom Wealth Management Group

“The overall theme I’m hearing more from some clients on relates to concerns about what is going on in the world right now, particularly with ISIS and of course the Ebola scare, and how that is impacting not only the markets but their personal goals. A few clients have expressed fear of travelling not only abroad but within the United States as well. Really this boils down to the concern about comfortably living our everyday lives, whether or not the fears are substantiated.”

John R. Salter
Wealth manager, principal
Evensky & Katz/Foldes Financial Wealth Management

“The extended low-yield environment has significantly altered how investors and advisers are allocating their assets. When faced with the traditional decision between stocks, bonds and cash, investors are favoring stocks and cash. Across our financial dashboard user base … no one age range group has as much as 20% of their portfolio in bonds — even those in their 70s and 80s. How this shift away from fixed income impacts investors over the next full market cycle is going to be very important.”

Kyle Ryan
Executive vice president
Personal Capital Advisors

“We’re hearing a lot from young families about having children, starting to make the choice of how they are going to care for the children. Is one of them going to stay home. If the one staying home reenters the workforce, there’s a sacrifice there as well depending how much the job pays. But it’s not just a financial decision, so you need to weigh all the factors.”

H. Jude Boudreaux
Founder
Upperline Financial Planning

“My older clients are finding that they would like to work longer, but at a reduced pace and would like to take a six-month or one-year break. My younger clients want to take a year-long break with their families while their kids are still young. This creates a fund challenge for planners. We have to increase near-term savings for the sabbatical, plan for income ramping back up when they return to work and think about what income is realistic when they come back.”