A Renowned Expert Speaks: A Discussion with Harold Evensky on the 4 Essentials of Managing Retirement Assets

By Amy McIIwain, President, Financial Social Media on Tuesday, October 11th, 2011

I had the pleasure recently of sitting down with Harold Evensky, the highly-renowned President of Evensky & Katz in Coral Gables, Florida, to get his perspective on strategies for managing retirement assets. Harold is widely recognized as one of the most influential people in the financial planning profession, has received numerous awards and accolades throughout his career, has been quoted widely in the industry press, and has authored several books on retirement planning.

Harold emphasized to me that 10,000 Baby Boomers turn 65 every single day, a remarkable number that will be sustained continuously for the next 19 years. So retirement planning as a necessity (and as a profession) will be in greater demand than ever.

Given this demographic explosion, I asked Harold about best practices for managing retirement assets, and he provided me with four basic tenets on which he bases his business. (In addition to the brief descriptions below, further details are available when you download our complete whitepaper on the Evensky interview.)

Don’t Ignore These Four:

  1. Don’t try to maximize returns—rather, maximize the probability that your clients will achieve their financial goals with the lowest risk possible. Harold cited two possible portfolio outcomes—“the most efficient portfolio” and “the most efficient level of risk”—and provided a formula for reconciling the two.
  2. Follow a “five year mantra”—as Harold states, “we don’t believe anyone should be investing funds they may need in the next five years. Otherwise, they may have to sell at the wrong time.” Harold provided several scenarios of how he’d advise clients with $1,000,000 in savings and a range of needs.
  3. Keep abreast of changes on the retirement planning horizon—in particular, “I see two changes that will impact how our team operates—the increased use of immediate annuities and reverse mortgages.” Harold provided a more in-depth description, the details of which can be found in our complete report on the discussion.
  4. Take advantage of tools to support holistic planning—for example, using data aggregation to see all of the client’s assets, including held-away accounts such as 401k’s. That enables you to take a holistic view of your clients’ portfolios in which you see (and advise on) all the investments they own.

Get the full story in our Whitepaper "Help Your Clients Better Prepare for the Future". We appreciated the opportunity to engage in a discussion with Harold, and we’re eager to pass along his observations to you.  

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