Financial Planning - November 2012

PRACTICE

switch to fee-based remuneration.

“The problem with regulation in this country,” Moisand says, “is not the quantity of regulation but the quality of that regulation.” On the one hand, he argues, the U.S. has too many ineffective regulations.

For example, he notes that dually registered advisors (those registered with a brokerage firm and with an RIA) can wear a financial planning hat one minute and switch to a salesman hat the next. On the other hand, the U.S. has financial transparency that is superior to that of other countries.

Moisand is convinced that an
international perspective can help
domestic advisors cope better with
their regulatory burdens and lobby
by William Bengen in 1994.

In the end, Moisand says, “Most clients choose something close to but less than 5% as a starting point.”

LEARNING TO DELEGA TE

Reviewing his career, Moisand believes his biggest challenge has been learning to delegate effectively. “I spent too many years as a solo practitioner,” he explains. “Since I like all this financial stuff, I want to do it all.” But he and other solo practitioners, at some point, eventually exhaust their personal capacity. Sole practitioners need to accept the fact that they like control and seek out people they truly trust when looking for a business team.

“Joining an ensemble practice takes a commitment analogous to marriage,”

Moisand believes that planning industry developments on other
continents will likely travel to the U.S.

more effectively for sensible regulation in this country.

At home, Moisand works with five other advisors (all CFPs) and five support personnel out of two offices, one in Melbourne and one in Orlando. Principals of the firm generally work with $1million-plus clients, although Moisand admits to a soft spot for pastors, teachers and military retirees.

A GRA TIF YING SPECIALT Y Over the years, Moisand has gravitated to retirement planning. This summer, he attended funerals for two clients — a reminder, he says, that personal finance is more often personal than it is finance. He also realized that neither of these clients came close to needing an inflation-adjusted income stream lasting 30 years. This insight increased his skepticism about the profession’s 4% safe withdrawal rate, established

All of this means that, for domestic planners, there is no set-it-and-forget-it rate of withdrawals in retirement, Moisand says. Advisors need to spend more time talking with their clients about spending habits and life expec-tancies. He finds retirees quite flexible in their spending habits, depending on how things are going in their own lives and in the economy.

In his own practice, Moisand
describes holding “a meaningful col-
laborative discussion with clients,” lay-
ing out a game plan for their retirement
and a tentative spending plan. But he
also makes sure that they are alert to
the possibility that changes in the
market and in their own behavior may
require adjustments and he encour-
ages them to face various specific con-
tingencies — “If the assets drop x% in
value, we will decrease withdrawals by
y%, [or] if our assets grow to x, we will
fund a scholarship at our alma mater.”
he says. Solo practitioners should take
time to know potential partners and
work together on several cases before
partnering. Another bit of advice:
Look for partners who see employees
as assets and beware of those who see
employees as expenses.