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Retirement Income Redesigned: Master Plans for Distribution: An Adviser's Guide for Funding Boomers' Best Years by Deena B. Katz, Harold Evensky

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Chapter 3. Decision Making at Retirement: High Stakes for the Long Haul

donald g. macgregor

When I speak to financial professionals about retirement income distribution, I often start my talk by asking, "How many of you are psychologists?" Usually, there is no response. My second question is, "Is there anybody here who isn't a psychologist?" Again, no one in the room raises a hand. This may seem like a contradiction, but it isn't. Of course, a financial adviser is not trained as a psychologist, per se, but invariably becomes one as part of the process of developing sound adviser-client relationships. Advising is inherently about psychological issues. Technical tools take you only so far; ultimately, effectiveness is a matter of good advice coupled with shaping the kind of judgment and decision-making skills in your clients that can lead them to achieve their objectives.

If you've done your job during the wealth-accumulation years, you've probably given your clients a reasonable education in personal finance. The more seasoned clients become, the more they learn to understand the world of financial planning and investment in the way that you do. Your mental model of finance has become theirs, and as a result of your guidance, they communicate more efficiently and likely have better weathered the ups and downs of market cycles, with a growing confidence that their wealth-accumulation plans are not forced askew by every market turn.

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