How St. Louis Financial Firms are Helping Clients Prepare
By Brian R. Hook
The number one financial concern among Americans is retirement,
but nearly two-thirds in a recent poll believe that they are
not saving enough for retirement.
“The most stunning statistic is that over a third of Americans
don’t think they will be able to retire ever,” says Chris Moloney,
chief marketing officer at Scottrade Inc.
The study by the Des Peres-based discount brokerage polled 1,000
Americans in February to gauge attitudes and behavioral information
about retirement planning.
“The challenge is that they are not saving enough,” Moloney
says.
For those nearing retirement, one in four say they do not know
how much they have saved. Twenty-nine percent nearing retirement
say they would like between $500,000 and $2 million when they
retire, but only 16 percent have that amount.
Respondents younger than 45 are more likely to say they want
to have more than $2 million saved by retirement. But they are
off to a slow start. About half have saved less than $25,000.
Plus, one in five of Americans are not sure how much to save.
Scottrade provides its clients with investing tools online to
help them plan for retirement. It has a retirement center online
and provides calculators to help with goal setting. Moloney
says there is also a great wealth of information on the Internet.
“The amount of information available to an individual today
is greater than what would have been available to a professional
even five years ago,” he says.
FINANCIAL BROKERAGE MECCA
While the Scottrade study was nationally focused, Moloney says
that other anecdotal evidence suggests that St. Louisans might
have more of an overall awareness about the importance of retirement
planning than other regions of the country.
“I think financial services and retirement planning gets increased
media coverage in St. Louis because a number of major financial
service firms are headquartered here,” Moloney says. “It is
somewhat of a financial brokerage Mecca here in the United States.”
In addition to Scottrade, full-service brokerages A.G. Edwards
Inc., Edward Jones, and Stifel Nicolaus & Co. Inc. are headquartered
throughout the region.
St. Louis and the entire Midwest fair well when compared to
other areas of the country, says Sophie Beckmann, personal finance
strategist at A.G. Edwards.
“People are a little bit more conservative. People do a better
job in the Midwest with regard to participating in retirement
plans and owning investments,” she says.
Out of 500 cities, St. Louis ranked 100 in A.G. Edwards’ 2006
Annual Nest Egg Index, which measures a dozen statistical factors,
including retirement plan participation, investment ownership,
home ownership, personal debt levels and living expenses.
In a ranking of the states, Missouri was 24th and Illinois ranked
11th.
REAL EYE OPENER
Beckmann says the goal of the study was to get people to start
talking about retirement planning. “It gives an indication of
how we are doing when compared with the rest of the country.
We are hoping to get people to open their eyes,” she says.
A.G. Edwards also provides a Web site at www.nesteggscore.com
where individuals can find their own personal score. Individuals
answer 14 questions and will receive a score that allows them
to compare themselves to the rest of the country. The Web site
also provides tips for investors based on the answers that they
provide.
“It is the simple things that a lot of people overlook, like
controlling debt. We find that to be a real drag on retirement
savings. The key is planning,” Beckmann says.
“We encourage them to sit down and identify their goals and
their risk tolerance and their time horizon—how long they have
until retirement. It’s a real eye opener for a lot of people
because they don’t realize how much they are going to need to
retire.”
FIVE-STEP PROCESS
Financial advisers at Edward Jones, headquartered in Des Peres,
meet face-to-face with clients on an ongoing basis to help them
prepare and plan for retirement.
“Whether it is a younger investor or somebody that is already
retired, our focus on reaching out to them is through community-based,
personal relationships,” says Clif Helbert, a principal at Edward
Jones who is in charge of retirement plan marketing.
“Everything we do at Edward Jones is delivered through our financial
advisers.”
Helbert characterizes the financial planning at Edward Jones
as a five-step process with multiple levels of details under
each step. The first step is gathering information. How much
money do you have? The second step is setting goals. Where do
you want to be, in how many years? Step three is analyzing the
information. Step four is implementing the plan. Step five is
ongoing, reviewing and monitoring the plan.
“We’ve got to turn information into action,” Helbert says.
TEAM APPROACH
Brown Smith Wallace LLC, an accounting practice based in Creve
Coeur, focuses on preparing an overall, comprehensive financial
plan. The firm works with a team of financial advisers, including
investment advisers, insurance advisers, and others.
“If we have the whole team of advisers working together, it’s
a much better result for the client,” says Michael Niemann,
partner in charge of family wealth planning.
“We want to make sure that they have a plan that takes everything
into account.”
Many advisers, while perfectly qualified in their area of expertise,
may only know about one particular area of financial planning,
Niemann says. “They may be an insurance salesmen, they may be
an investment adviser, or they may be a tax person that just
focuses on their core competency and don’t put together a comprehensive
plan.”
Niemann says the financial services industry needs to be more
proactive.
“A tax person could just prepare a tax return for a client,
an investment adviser could just pick the stocks,” Neimann says.
“But if you just stop there and you are not proactive on the
planning, you haven’t brought any value to the relationship.”
SAVE UNTIL IT HURTS
If someone decides to work with Gary Ott, a financial consultant
with AXA Advisors LLC in Chesterfield, the client must first
commit to a periodic review.
“It’s kind of like when you go to a routine physical examine,”
he says. “If you are beginning to develop signs that could shorten
your life, you start to change things.”
Ott says the most important thing financial advisers need to
do when working with clients is to stress the importance of
saving money on a regular basis.
“Save until it hurts and then just back off a little bit,” he
says. “If something hurts too much you stop doing. So, save
until it hurts and back off. Now we are in the zone.”
