The theme for this month’s Lunchtime Learning at the PC MARC, is Strategies for a Sustainable Income in Retirement.
Certified Financial Planner Jon Neilson says the financial advisement industry has a low barrier to entry, and the public doesn’t have a great idea of the difference in titles.
“There is hundreds of titles out there, and unfortunately a lot of them don’t have any legal or regulator meaning. So, for example, financial advisor, financial consultant, wealth manager, those have no legal or regulatory meaning.”
Neilson further explained. “(What) you want to be looking for, is if it’s for example, an investment advisor, that has a legal meaning. Meaning, they have to be a fiduciary and do what’s best with the highest standards of care for clients. If it’s just an insurance agent, they’re just pushing some product. If it’s a registered rep, that means they work specifically for a company and they have products that they’re probably being forced to push on the client. But they don’t have to do what is in the highest standard of care for the client.”
Nielson is the guest speaker at this month’s lunchtime learning at the PC MARC. He says, that there’s no catch-all recommendation that he, or any financial planner, can give. Neilson says you need to sit down and understand individual’s financial circumstances.
“You really need to sit down with an investment advisor, who’s a financial planner who can walk through and look at everything before they make a recommendation. Because until you really sit down and find out what their needs are, how much experience they have, what kind of risk tolerance they have. It’s hard to give them a recommendation, but once you get down and sit down and spend time with them you can find out what they really need.”
“ROTH IRA’s are great because if you don’t use them until you’re 59 and a half it’s all tax free, but if you need emergency money you can get to that money with no penalty. It just really depends, there’s a lot of products out there and until you really know the client you shouldn’t be recommending anything.”
He quoted a recent survey. Of those American's who retired in 2016, 50% had less than $5,000 in assets.
“Basically, that means there’s 50% of Americans that are living on Social Security and that’s it. It’s really not a whole lot. It’s important to invest a little more aggressively and make sure you’re working with somebody that you trust.” Neilson said.
“You know it’s interesting because, people make one mistake in investing and they get upset and they walk out of the game. So, for example, in 2008 when the market crashed. So many people, we hear these stories all the time, they say ‘hey the market crashed so I moved all my money to cash and I haven’t got back into the market yet.’ Unfortunately, that means they lost literally 10 years of growth and they could’ve recouped their money and probably doubled it. But they’re still in cash, because they got afraid.”
You can hear Neilson speak Wednesday (tomorrow) at Noon in the PC MARC.