As many know, I am a big college basketball fan. When you look at some of the most successful programs in the country, you’ll find one thing in common: consistency in coaching. Coaches like Roy Williams at North Carolina, Coach K at Duke, Bill Self at Kansas and Rick Pitino at Louisville have all been at their schools many years. Some years have been better than others at those schools, but no one can deny those programs have stamina and a level of excellence that is well above the average college program. Even with successful programs that have seen coaching changes over a period of years, the same culture will likely exist throughout the program.
Having a quality coach at the helm is equivalent to having consistency in your retirement portfolios. There will undoubtedly be market downturns and volatility, but consistency provides a powerful motivator for our clients to remain with their plans. Consistency comes from us always being in communication with our clients, even in difficult market times. We must be a consistent voice for our clients and prospects, providing information, education and advice—even when our clients don’t want to hear what we have to say. Plus, we need to listen and react to our clients’ biggest concerns—turning their assets into retirement income.
Vehicles providing guaranteed income could create the kind of stamina and consistency in a portfolio our clients seek. It’s not that the entire portfolio needs to be guaranteed—far from it. In fact, our research shows that between 18-28 percent of income should be guaranteed to optimize the retirement income. That leaves plenty of assets to be invested in an allocation strategy that can protect purchasing power due to inflation.
Our industry needs to look at new ways to provide guarantees and create consistency and stamina for retirement income. Several vehicles can reduce the pressure—or improve upon—a systematic withdrawal strategy. We need to educate our distributors, broker-dealers and advisers on vehicles like HECMs, income annuities and Qualified Longevity Annuity Contracts (QLACS). All are underutilized today but could provide valuable benefits to our clients’ retirement income portfolios.
Think like a successful college program or sports franchise. Add consistency to your retirement income portfolios for more success with clients
Mike McGlothlin is a tireless advocate for the retirement planning industry. As executive vice president of annuities at Ash Brokerage, he heads a team providing income planning solutions focused on longevity and efficiency. He’s also a thought leader who provides guidance and assistance for advisors and broker-dealers navigating marketplace and regulatory changes. You can find a collection of his blog posts in his book, “Above the Clouds … Winning Strategies from 30,000 Feet.”
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