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FAs Reveal Common Concerns of Plan Participant Clients

By Crucial Clips     January 9, 2019
The following text is a transcript of a portion of a speaker's presentation made at an industry conference or during an interview. This transcript solely represents the view of the individual who spoke, and not the view of Financial Advisor IQ or any other group.
Source: FA-IQ, Jan. 3, 2019 

RITA RAAGAS DE RAMOS, SPECIAL PROJECTS MANAGER, FINANCIAL ADVISOR IQ: What is the most common concern that retirement plan advisors are hearing from plan participants or IRA account holders?

Some of the Financial Times' Top 401 advisors share their feedback.

FRANCESCA FEDERICO, COFOUNDER AND PRINCIPAL, TWELVE POINTS RETIREMENT ADVISORS: I think that now when you look at the 401k landscape, it's changed a lot, and the participants are a lot younger. And what we're finding is they're struggling to even put any money in the plan because they're so straddled with debt.

So what we've been doing is trying to educate them more to even put in enough to get the employer match within the plan.

BARBARA DELANEY, PRINCIPAL, STONESTREET RENAISSANCE: Through one-on-one meetings and CFP health plans, I think when people finally get to that finish line, they don't even know how to draw down. They don't know if they can take distributions on a monthly basis. They don't know when they should apply for social security. So they really, really need some hand-holding, whether it be coming out of a plan, or an IRA.

Robo advisors are there to a certain extent. I just think when someone's ready to retire and spend their life savings, that's where we need to step up and be the one-on-ones or using CFP helplines.

JAMIE GREENLEAF, LEAD ADVISOR, PRINCIPAL, CAFARO GREENLEAF: The biggest concern that they have is really understanding what they're solving for, how much money are they going to need to retire, and ultimately, what is retirement going to look like? So the only thing we can do to ease some of those concerns is to continue to run analysis for them to show them that either they're on track or that they need to continue to contribute and work for a little bit longer.

KEVIN MAHONEY, MANAGING DIRECTOR, THE MAHONEY GROUP OF RAYMOND JAMES: Twofold. One is running out of money and how to cover health care costs in retirement.

So we believe that every employee should have some sort of financial plan, whether it's through us or through an outside party. Many of our plan sponsors actually engage us to do financial plans for their employees.

Getting everyone to engage is difficult. But once they've engaged, they have a plan, they've put pen to paper, and can really measure what is most important to them, we find that helps with their at ease.

JOHN CUNNINGHAM, SENIOR VICE PRESIDENT, ALLIANT RETIREMENT CONSULTING: Most of the participants that we meet with always have a concern about saving, and whether they're saving enough. But they were also saddled with debt. So whether that's, again, tuition debt or credit card debt, and their monthly expenses -- how do they fit retirement into that overall spend?

Our job is to sort of create that sort of budget. And there's plenty of tools directly, either online, through your phone apps that could help facilitate and educate people directly on that.

And simple [ideas] about one less stop at Starbucks each week. Or maybe packing a lunch two or three days a week in terms of how they can get that retirement savings started.

And for younger employees, it's about getting started early, and starting at a small dollar amount. And for other employees, it may be about catching up, and looking at other ways they can sort of consolidate other debt that they might have to save more in their retirement. And those are really the biggest concerns for most employees.

But the older ones that are ready to retire, it's what's the most tax-efficient way to take the money out?

DANIEL KETCHUM, RETIREMENT PLAN ADVISOR/ FINANCIAL ADVISOR, RAYMOND JAMES FINANCIAL SERVICES: I've been doing this for 29 years, and it's the same. Do I have enough money? And I don't want to run out of money, right?

And so I'm in a unique situation as a retirement plan advisor to deal with the wealthy, the "have." They don't want to run out of money, right? Or it might be multi-generational planning. And so to design their investment allocations from a tax advantage standpoint.

For the people that it might be a little more challenging, they have different needs, right. Are they able to save enough? Are they asset allocating their money properly?

Student loans are an issue, right? That's the second largest area of debt these days. So there's a multitude of factors, depending on where one falls on the wealth spectrum.

JOSHUA COUGHRAN, MANAGING PARTNER, TITAN RETIREMENT ADVISORS: Two types of participants. There are people that are planning for retirement. You have the ones that just want to forget about it. They want to not address it, not think about it because it causes too much stress. And then you have the people that want to learn, and they want to actively get to understand.

So you have to create this situation -- you have to create availability for them to access. And everybody's different -- everybody learns different, Everybody has a different schedule. So whether they go to one-on-one meetings, whether they want to log into a webinar and look at a webinar, or whether they want to do a group meeting on site, which we run often, or give us a call and do something over the phone, those are the main things.