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Ask Your Prospects If They’re Spending as Much Time Planning for Retirement as Their Last Vacation


Ask Your Prospects If They're Spending as Much Time Planning for Retirement as Their Last Vacation

Written by: Ted Parker

If investors pay a travel planner to plan their vacations, why don’t they pay Registered Investment Advisors (RIAs) to plan for their retirement?

In my previous life, I worked as a RIA. I know firsthand all the challenges, and benefits, investors can face daily. I saw investors spending more time planning for their vacation than planning for their retirement. And typical investors didn’t follow a plan. They lacked discipline.

They let emotions drive their investment decisions.

Many years ago, I was the VP Regional Investment Consultant at Fidelity Investments, and covered all the retail branches west of the Mississippi. I showed financial representatives how to talk to their clients about the possible benefits of paying a fee for “discretionary asset management”.

I spoke at numerous branch-sponsored seminars attended by financial representatives and their clients. At these seminars, I discussed some of the inherent risks in global capital markets, and the long-term rewards that may come with consistent, careful investing.

It’s been academically proven that a disciplined approach to investing can deliver higher market returns over multiple market cycles. It may be boring, but it works. The goal of our seminars was to illustrate that global capital markets could be successfully navigated. It also showed that there was, and will always be, a reason NOT to invest. We showed clients how they could manage their own portfolio, or hire someone to do it for them. And it wasn’t presented as an “all or none” solution.

“Many chose to have their “serious money” professionally managed, but would keep a “side account” to make “speculative” investments.”

A story I often shared with these investors, that seemed to resonate well, was one about when my daughter Lauren and her boyfriend Connor were planning a summer trip.

They wanted to celebrate her graduation from college. Their 10-day road trip up the California coast would continue through Oregon, Washington, finally ending in Vancouver, Canada.

The two of them met with a travel planner, and came away with a bundle of information that gave them a step-by-step guide on how to plan for their vacation. It contained all the sites, hotels, coffee shops, and unique restaurants along the way. They had a complete plan to see everything they wanted in the 10 days allotted. They had time to enjoy their summer road trip, confident they would see everything.

Without a travel planner, they wouldn’t have been able to make the most of their vacation. Without a travel planner, they may not have been able to hit all the cool spots along the coast. And without a travel planner, they wouldn’t have been able to do all the things they accomplished during their trip, maximizing the time they spent sightseeing.

When you think about it, investment planning is a lot like planning a summer vacation. And a Registered Investment Advisor is a lot like a travel planner, helping clients achieve their financial goals and travel through life financially fit. RIAs can help clients with the accumulation, the preservation, and the distribution of their wealth. They take on the burden, and responsibility, of managing risk and making the tough investment decisions.

Related: Why Your Retirement Is More Important Than Saving for Your Kids Tuition

You provide your clients a “Financial Travel Plan” to help them through life.

When it comes down to it, the typical client of a RIA hires the firm to do the job they can’t or don’t want to do:

  1. Develop a goals-based allocation PLAN.
  2. RESEARCH investments continuously.
  3. REBALANCE the investments to keep the PLAN on track.

So, the next time you talk with a prospective client, someone you meet in a social event, or even your doctor as you sit there on the exam table, try doing this and see what happens.

Ask that person if they recently took, or are planning to take, a summer vacation. People love to talk about their vacations. Ask for details of where they went, where they stayed, and the sights they saw.

Then ask them if they spent this much time planning for their retirement.

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