Building a Successful Practice: It is estimated that 70-80% of investors who deal with a stockbroker, financial planner or advisor will change advisors before retirement. Some will make the change while in their fifties, others will wait until their early or mid-sixties. The reason for the change is simple: Investors view their financial person as being “growth oriented,” an accumulator who is not an expert when it comes to structuring income. When the change is made, a retirement specialist is sought.

Clients Change Advisors: Over the past couple of years, the brokerage industry has begun to promote retirement income, but the campaign has been limited and met with skepticism by investors. After all, advisory account compensation is based on assets under management–distributions only erode the advisor/broker base. The retirement benefit specialist has a very different agenda: maximizing periodic distributions at an acceptable risk level.

Investors are generally loyal to their broker or advisor, but such a relationship usually ends once the investor gets serious about retirement planning. It is not that they no longer like their advisor, they simply view this person as not having the expertise to help them with the income phase of their life. Enter the retirement plan specialist.

Retirement Specialist: The vast majority of your peers and competitors promote themselves as being able to do everything for the investor. This makes it difficult for any advisor to differentiate themselves. It is always the specialist we seek out when a problem arises (e.g., car mechanics who specialize in foreign cars, the doctor who only does a certain type of eye surgery, etc.). This is a lesson brokers, planners and advisors have still not learned. For example, how often do you see an advisor who advertises as a “retirement plan specialist” or simply a “retirement specialist?”

The specialist makes the most money and has the least complicated life. A retirement benefit specialist can hone his skills by concentrating on a very narrow aspect of the financial services industry, thereby differentiating himself and minimizing concerns.

Even though it appears the retirement specialist is “leaving money on the table,” the reality is quite different. A portion of a client’s portfolio may be in CDs, government securities and fixed-rate annuities, but another part may be in growth-oriented mutual funds that include a systematic withdrawal plan. And, just because someone is in an income mode does not mean she no longer needs insurance or no longer desires to fund a grandchild’s college fund.

Competitive Edge: During a brokerage firm’s annual meeting in a big conference hall, someone from Harley Davidson rides down the aisle in a motorcycle towards the podium. He parks the bike, steps up to the podium, looks at the audience of surprised advisors and says, “What’s your sound?” Harley’s have a special sound but how many brokers do you know have their own “sound?” No one can distinguish the sound between a Honda, Suzuki, BMW or other bike–except a Harley. This is why the company has trademarked their sound.

What makes you different? Why would someone want you to manage their money instead of a neighbor, friend or golfing buddy who does the same thing? Investment products have largely become “commoditized” and offered by everyone. Ed Slott has made a fortune by becoming the IRA-go-to-guy; he is frequently quoted in publications and is considered an expert. Ed has a lucrative practice of advising brokers, and fee-based seminars and referrals. Someone else could have filled such a position, but Ed was first and will probably not be replaced. You could become the retirement plan specialist in your county or the retirement specialist that is referred by accountants and lawyers.

Understand Your Customers and Prospects: People seek out and feel comfortable with a specialist. The first step to becoming an income specialist or retirement specialist is to obtain certification marks that distinguish you from others. Being a designee shows everyone that you have the specialized training necessary to handle their income needs.

Copyright (c) 2010 Cory Bowman

Retirement is a big issue, what can be called a moment of truth for every employee. Irrespective of the stature or economic position of the employee, retirement would mean a sudden break of a lifestyle that has imbibed into the mind of a person through years of practice. Also retirement would bring some sort of financial constraint and in some cases financial burden. Such problems tend to cause a lack of self-respect. When such issues are coupled with natural old age health problems, life will appear a less attractive entity. People generally will get a large amount of money as retirement benefit. How to spend that money effectively will also be a big question for most people. So once the age crosses the psychologically important landmark of 50, retirement worries are likely to cloud over the minds of most people.

To overcome these problems associated with retirement, many employers have started giving retirement planning training to their employees who are likely to retire in the near future. Some organizations provide in-house retirement planning training. Some others hire external agencies and consultants to provide training to employees on life during and after retirement. Not all companies provide that sort of training though. For employees of such companies, there are plenty of independent institutes and courses that offer retirement planning training.

Many retirement planning courses are a masqueraded form of financial planning. Promoters of such courses are more concerned with the money of the person rather than the life of that person after retirement. So it is better to join an organization, which provides retirement planning training in the first place. If that could not be attained, always conduct a thorough investigation about the retirement planning courses available in the nearby places. Always consult people who have undergone the training in a particular institute before joining. Select a course, which suits your lifestyle and budget. Nowadays, there are online courses, which provide retirement planning training. But experts are of the opinion that training in an institution that provides one-to-one training is a far better option to get a proper understanding of life after retirement.

The course content of retirement training varies from institution to institution. Some institutions claim that they provide personalized training. That means they analyze the nature and environment of a person and structure a retirement planning training course accordingly. Generally a good retirement planning training course will contain subjects such as tips to adjust to a new lifestyle, issues related to health and healthcare, benefits provided by the government, an overview of taxation and mortgages, wills and power of attorney, investment opportunities, issues related to home and environment, and, last not the least, how to manage and spend time usefully and peacefully.

When people think about their overall retirement strategy, they often include plans such as 401(k)s and IRAs. Many overlook the possibility of using a defined benefit plan as an additional tool for reaching their retirement goals. Defined benefit plans are often misunderstood, considered a thing of the past or erroneously thought to be appropriate only for large corporations. Defined benefit plans can provide a very rich retirement planning tool for small business owners, allowing them to maximize their contribution up to $200,000 or more.

What is a Defined Benefit Plan?
Defined benefit plans are retirement plans in which the employer promises to make specified benefit payments to qualifying employees at retirement.

There are Two Types of Defined Benefits Plans:
Pension Plans: A pension plan is a retirement plan in which participants are given a pre-determined monthly benefit amount provided they meet certain requirements. Monthly benefits are calculated based on age, years of service and income. An employer must maintain the plan at an adequate funding level to meet future benefit obligations.

Cash Balance Plans: A cash balance plan is a hybrid of defined benefit and defined contribution plans. An employer credits a participant’s account with a set percentage of his or her yearly compensation plus interest, and guarantees a contribution level and minimum rate of return.

Advantages of Offering a Defined Benefit Plan:
o Owners can contribute more than the 401(k) limits of $15,500/$46,000
o Owners have the option to overfund contributions (150%) in a good year
o Provides a powerful tool to retain high quality employees
o Allows for larger tax deductions compared to a defined contribution plan
o Employer contributions can be taken as a business expense deduction
o Allows an excellent way to provide retirement income to employees who have a short window before retiring (owners and mid-or late-career new hires)
o ERISA protects qualified plan assets from more creditors in the event of bankruptcy or lawsuit