Wealth Adviser: More Flexibility in Retirement Spending

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Dynamic approaches to tapping retirement savings, with names like “floor and ceiling” and “guardrail,” are gaining some favor with financial advisers. They allow retirees at times to exceed the 4% annual withdrawal rate that long was a rule of thumb in financial planning, but they also have a downside, The Wall Street Journal notes: In any year in which your portfolio loses value, you may need to tighten your belt. “There is no free lunch,” says Jonathan Guyton, a financial adviser in Minneapolis who devised the guardrail strategy. It calls for recalculating the withdrawal rate if the year-end balance in a nest egg has changed significantly.


Bond alternatives see withdrawals. In recent years, money poured into real-estate investment trusts, master limited partnerships and dividend-paying utility stocks from income-starved investors looking for yields that haven’t been available in the bond market. Now, portfolio managers are pulling money out of those alternatives, anticipating interest-rate hikes, The Wall Street Journal reports. “Equity investments that are kind of masquerading as a bond…are going to be the most vulnerable” when rates go up, says Oklahoma-based adviser Tim Courtney.

Planning for a high-tech retirement. New web-based technologies will change how people live in retirement, with wearable devices and even “smart” refrigerators and toasters. Those services will involve subscriptions, of course, so “the Internet of Things will create a new line-item of monthly costs,” says Joseph Coughlin of the Massachusetts Institute of Technology Agelab. “These will be expenses that are neither strictly health care nor communications, but an entirely new price of living well in older age,” he writes on The Experts at Financial planners need to take them into account.

ETF target-date funds fall by the wayside. Investors and financial advisers may love exchange-traded funds, but not for building target-date funds. Deutsche Asset & Wealth Management has liquidated its X-trackers series, the last target-date funds made up entirely of ETFs, reports InvestmentNews. The funds had just $136 million in assets. BlackRock Inc. liquidated its all-ETF iShares Target Date series in October, saying the decision was based partly on “limited investor interest.”


How to help new associates succeed. When advisers take on an associate adviser, they need to focus on four things: time management, goals, motivators and accountability. “You have a responsibility to your associate as much as he or she has one to you,” says industry coach Matt Halloran, writing on Wealth Adviser at “The more you put into your relationship with your associates…the more successful they will be, the happier they will be and the longer they will stay.”


Wealth, investment banking mix it up at Morgan Stanley. Executive appointments at Morgan Stanley are serving to more tightly knit its wealth-management and investment-banking units these days. As Vince Lumia moves up to be the new head of private wealth management, an investment banker is moving into his old job as head of the unit that executes wealth clients’ trades, The Wall Street Journal reports. In March, longtime retail brokerage executive Andy Saperstein moved over to investment banking.

Ad campaign promotes BrokerCheck. A new TV advertising push for BrokerCheck is aimed at making that web-based database as familiar to investors looking for an adviser as Carfax is to used-car buyers. “BrokerCheck is this sort of jewel of information about a registered person’s background,” but too few people use it, says CEO Rick Ketchum of the Financial Industry Regulatory Authority. “All of us are so used to checking reactions and reviews for so many things with the accessibility of the Web, but we don’t do it with respect to investments,” he tells USA Today.




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