Paul K. Stetter Jr. knows his clients' biggest fear is outliving their savings. Yet, the pragmatic Ephrata, Pa.-based financial advisor doesn't mince words when telling investors how much they'll need for retirement. Helping clients stay focused on saving is how the first vice president at Fulton Financial Advisors ensures he meets clients' best interest, as well as their retirement needs.

Where do you see clients needing the most help?
My clients' biggest issue is how much they need to sustain their standard of living into retirement. We've all seen changes in the last few years, and everyone wants to know if they can still get to a point where they can retire.

I tell clients they have to break needs from wants. If you can identify needs, that's what you take care of first. Then we encourage them to save more. If you get a 3% raise, put 1% away, because it's hard to scale up. It's always easier to scale back. I just had a couple in their fifties with an asset base of about $200,000 and both lost their jobs. They were still planning to save for retirement. With inflationary costs they don't have a lot of money to supplement now for retirement, they don't have a pension, and they can't start drawing on Social Security.

Do you think investors have appropriate expectations for today?
They ask, 'Can I retire? I want to go sailing, and visit my grandkids in California and Arizona.' And I'll say: 'Here's the bucket you should have for travel expenses. Do you have that?' I try to be up front with clients, when I'm educating, without being belligerent. I don't think Social Security is going to be there, at least not what it looks like now. So if you don't plan your retirement early, I don't want you to call when you're 65 years old and ask if you can live with me. You've got to do something about retirement early, even if it's just saving $50 a month. You have to get the process started.

Have concerns about healthcare costs in retirement grown?
I've been asked that more frequently in the last few years, and it's the longest conversation we have [with clients]. If they're looking at early retirement, and their company does not provide health insurance, they can COBRA for 18 months, but then they have to buy their own policy. And where are those premium payments going to come from? Clients also ask about long-term care, particularly if they're going through that with parents. If they've experienced it and seen how it depletes savings, it's not a hard conversation. The hard conversation is how to fund it. One lady said she was going to give her money away to her children and then have the state take care of her—and she's a doctor.

Do clients focus on their retirement income needs, as well as retirement planning?
I tell clients that when they hit the distribution stage, not to come to me just six months before they want to retire. We should be planning five years out, as those are critical times to start ramping up what they may need, and to see if they can put more money away. Hopefully by then debts are minimal, and they're empty nesters with kids out of the home. So I give them homework, and tell them to do a budget, which we back into with Social Security and then assets. If they see on paper—whether the situation is good or bad, or if they can or can't retire when they want to—then it's more meaningful.

How have you changed your investment strategy in the past few years?
I'm a big proponent of non-correlated asset classes. Not that buy- and-hold is dead, but I believe there's a more tactile approach that people are looking for in their accounts in general. I've tried to use a non-blinder approach, where I'm more open-minded, giving clients a couple of options. I like commodities, inflation-protected securities, real estate and managed futures. And in the past year or so I've added structured products. The way I structure my practice—I'm not trying to hit a home run, I'm trying to hit singles and doubles, and manage risk.

Where do you think advisors could improve when working with clients?
Financial advisors tend to be very technical and analytical. I think we could do a better job listening, and bringing the process down to a basic level so that people understand. I'll explain something two to three times and take the extra 15 minutes. I know they're not going to remember everything when they come here, but I try.

Have more clients asked to contact you over social media?
We're finalizing our website, which is a huge start for us. I have an account on LinkedIn, but I don't get anything off it and I've never done Twitter. I feel that if you want me, you call me. I don't mind a text, and I've definitely had more people email and text than ever before, particularly younger clients. But older clients still like that face-to-face conversation.

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