Military Clients Require Special Maneuvers, Handling For Advisors – Investor’s Business Daily

Advisors tend to think highly of their clients. That’s especially true if they admire a client’s character and courage.

X For advisors who work with active or former military members, their admiration leads to heightened job satisfaction. Helping these warriors often becomes a labor of love.

“What’s so great about this market is you can not only make a living, but it’s so rewarding to serve these folks because they’re so deserving,” said Scott Spiker, chairman and chief executive of First Command Financial Services, a Fort Worth, Texas-based advisory firm.

Spiker notes that military benefits are in flux as a new retirement system takes effect this year. It features a blend of the long-standing fixed pension with a 401(k)-like defined contribution piece.

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This represents the biggest change to the military retirement system in 70 years, so advisors with military clients face a fresh set of retirement planning questions. The parties seek to navigate the Blended Retirement System based on the individual’s length of service and other variables.

For those currently serving in the military, focusing on personal financial matters can require heavy lifting. Limited time to meet with an advisor, coupled with the demands of frequent travel and training exercises, can leave these individuals with less opportunity to research their options.

To accommodate military clients, advisors use video chat and email as well as phone calls. Face-to-face meetings around a conference table can prove a rare luxury.

“For the actively serving, the greatest challenge is setting up a game plan to communicate with them,” said Chad Feucht, an advisor and military veteran in Fond du Lac, Wis. “They’re getting deployed and moving around a lot. So we set up a plan that doesn’t take a lot of day-to-day attention.”

Decisive Risk-Takers

Advisors in search of a niche might target a high-net-worth crowd. But those in the military do not sit atop the list of richly compensated professionals.

“Even with four-star generals and admirals, you’re not dealing with really wealthy people,” Spiker said.

Yet Spiker, a commissioned officer in the U.S. Navy, finds that military members can make great clients. He lauds their decisiveness when weighing financial options.

“They’re more likely to move on a decision than say they need time to think about it,” he said.

He also describes them as prudent risk-takers who “have some money and a pretty long runway” to capitalize on the power of compounding. They may favor dollar-cost averaging and other long-term investment strategies.

Financial planners often invite military members to look ahead. Feucht and his colleagues like to ask questions such as, “How do you envision your career playing out?” and “How long do you plan on serving?”

“These are difficult questions to answer for anyone,” Feucht said. “The important thing is to challenge them to think about these questions deeply.”

Every Minute Counts

Advisors with military clients may need to acquire a new vocabulary. In addition to mastering the details of the new retirement system, they must understand the nuances of active duty service vs. National Guard and reserve service.

“There’s also the issue of follow-on civilian employment,” Feucht said. Because many military personnel transition to a second career after completing their service, advisors should take a holistic look at their client’s entire working life and how their earnings and benefits can impact their retirement.

Feucht compares the advisor’s job to a military commander’s role. Leaders of a military unit seek to develop and safeguard their team, offering ideas to perform more effectively, anticipate and address obstacles, and pounce on educational and training opportunities.

Similarly, the best advisors don’t just direct investments, track cash flow and project retirement savings. They also “consider the person as a whole,” Feucht says.

Well-organized advisors value their clients’ time. They prepare diligently for meetings by notifying the client in advance of what issues they will cover, what materials they need to review and what questions to consider.

Such preparation is particularly important with military clients.

“Their time is important,” Feucht said. “As an advisor, you may have to cram a lot of information and discussion into a limited amount of time.”

For advisors who are just starting to work with military personnel, they may assume their clients are under constant stress. While military life can entail periods of difficulty and upheaval, individuals who serve often learn to manage stress effectively.

“While you have to be aware of the stressors they face, they’re normal people,” said Jeremy Feucht, an advisor who works with his brother, Chad, at their firm. “They have the same goals and face many of the same obstacles that others face,” such as managing their money and planning for retirement.


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