The do's and don'ts of retirement planning

The do's and don'ts of retirement planning
Rule No. 1: Stop being an asset manager and become a plan manager.
MAY 05, 2015
If you really want to develop best practices for your retiring clients, stop being an asset manager and become a plan manager. That was the message from one of the speakers at a panel on decumulating assets at InvestmentNews' annual Retirement Income Summit in Chicago on Monday. Phil G. Lubinski, founding partner of First Financial Strategies, said that to come up with a sustainable plan for retirement income, advisers have to go beyond the mentality that they can merely act as asset managers or that they can put all of the client's money into an annuity with an income rider. Sustainable retirement income planning requires a more active role on the part of the adviser, he said. “Advisers have to get out of this asset manager mentality and into [that of] a plan manager,” he said. “Manage the plan for the client.” LONGER TERM GOALS In practice, that also means keeping clients aware of their longer term goals. When markets are rocky, clients become distracted and forget that their priority is to have sustainable income – not to chase returns. “Think of the portfolio as a forest, and [the client is] panicking because [he] thinks the [whole] forest is on fire,” Mr. Lubinski said. “In reality, only a portion of the forest is on fire, and the portion giving … income isn't even warm. The part that's on fire won't be needed for another 20 years; it will replenish.” Behind the scenes, meanwhile, advisers are contending with volatility in the investment portfolio. Any risk that can't be controlled, such as longevity risk, can be shifted to an insurance company. The model of outsourcing risks that can't be controlled, managing what's within the adviser's control and reminding clients of their long-term goals, all work together to keep the investor on track and in the market. “We are constantly monitoring the future of the next segment [the next bucket of assets a client is expected to tap], what it's capable of doing,” Mr. Lubinski said. “It's the constant management of what's going on in the markets, what's going on in the client's needs and adjusting the glide path.”

Latest News

Roughly three-fifths of Americans agree on higher taxes for large corporations, higher-income households
Roughly three-fifths of Americans agree on higher taxes for large corporations, higher-income households

Pew survey reveals slight majority consensus on tax rates, but views splinter based on political alignment and income levels.

The Fed's going to cut rates
The Fed's going to cut rates

While the Federal Reserve's decision to hold interest rates steady in March was widely expected, it's the reactions from financial professionals that provide a more nuanced picture of the central bank's approach.

Ontario Pension Fund revamps PE business in light of global risk
Ontario Pension Fund revamps PE business in light of global risk

The pioneering member of Canada's Maple Eight is stepping back from its go-it-alone private equity approach as a drought in deals and Trump's trade war prompt a rethink.

Raymond James, RBC reel in UBS advisors managing over $690M in assets
Raymond James, RBC reel in UBS advisors managing over $690M in assets

The firms' latest additions in Florida and Nevada come as a strategic change at UBS raises risk of advisor defections.

Assetmark debuts new advisor succession planning program
Assetmark debuts new advisor succession planning program

The new program offers opportunities and events structured for rookies, next-gen advisor leaders, and soon-to-exit veterans.

SPONSORED Beyond the all-in-one: Why specialization is key in wealth tech

In an industry of broad solutions, firms like intelliflo prove 'you just need tools that play well together'

SPONSORED Record growth: Interval funds emerge as key players in alternative investments

Blue Vault Alts Summit highlights the role of liquidity-focused funds in reshaping advisor strategies