Tag Archives: wealth management

Renaissance of the Annuity via Insurtech

The notion of paying out an annual stream of income can be traced back to the Romans. It’s a simple notion and one of the earliest forms of wealth management. Today, the simplicity of that notion has been replaced by the complexity of the annuity product. Rooted in a time way before the iPhone, the conventional annuity looks tired in the digital world. It’s an old world approach long overdue for a refresh and reinvention. To explore this further, Rick Huckstep spoke with Matt Carey, CEO and co-founder of Blueprint Income.

It’s a different world now 

The baby boomers are retiring. When they made their plans for the future, the world was analog. Individual advice was based on human judgment, the personal touch and “trusted, expert” relationships. This was how the world of wealth management worked pre-internet.

However, today, for many U.S. boomers, the prospect of actually giving up work is still some way off. This recent U.S. study by the Insured Retirement Institute reported that as many as two in five of American baby boomers have nothing saved for their retirement.

Increased longevity and the massive decline in employer pensions in the 21st century are major factors behind the prediction that as many as half of Americans will not be able to maintain their current lifestyle.

The point is that the baby boomer generation, and Gen X for that matter, have shifted from creating retirement wealth through a lifetime of work to protecting what they have for now.

Which means that the wealth management target client has changed. It’s no longer a baby boomer market, or a Gen X market for that matter.

Now it’s the millennials who are the core client (target) base for wealth management. With 40% of the global adult population under the age of 35 years old, this is a generation who has only known a digital world in adult life.

Rise of the affluent millennial

But it is more than a digital divide that separates the generations. Millennials’ attitudes and behaviors to creating their own wealth are different, too. These differences are shaped by factors such as: debt-funded education, greater levels of social conscience and engagement, a broader world view and higher levels of self-employment.

Which is a challenge for the wealth management industry as it adapts to a different customer profile. Building a wealth management proposition for the millennial generation has to reflect the different demographics compared with baby boomers and Gen X.

See also: How Insurance Fits in Financial Management

There’s tons of research out there that reports how attitudes and behaviors have changed over the generations, even back to the silent generation. In this 2015 survey of more than 9,000 millennials across 10 countries by LinkedIn and IPSOS, they found;

  • millennials expect to be financially able to travel and see the world,
  • 60% expected to be wealthy (even though they earn about 20% less than the baby boomers,
  • they do not rely solely on wages for their income (trader by day, Uber by night),
  • and are more likely to carry debt than Gen X (repaying student debt has replaced saving for retirement),
  • nine out of 10 millennials use social networks for input on financial planning,
  • as well as being more likely to take advice from family members,
  • and are heavily influenced by their peers,
  • millennials are half as likely to be married compared with baby boomers at the same age,
  • they are seven times more likely to share their personal information with brands they trust.

The financial literacy problem

There is another dynamic that is important to consider when looking at how the wealth management industry serves the millennial generation. Financial literacy, or the lack of it!

The millennial generation may be more informed than their predecessors, but not necessarily in everything. They are more likely to know who Kim Kardashian is than to understand the impact of inflation on their savings over time.

In itself, there’s nothing new in this, but the fact is that the level of financial literacy in the U.S. has been dropping for years.

According to survey results by U.S. regulator FINRA, the level of personal finance literacy has fallen every three years since 2009. They found that 76% of millennials lack basic financial knowledge. Which is hardly surprising when only 14% of U.S. students are required to take a personal finance class in school.

See also: Raising the Bar on User Experience  

The FINRA survey also reported a massive gap between the level of financial understanding and the desire to have one. The survey found that 70% of adults aged between 18 and 39 years old “know they will need to be more financially secure, they just don’t know how to get there.”

What is clear from the survey is that this lack of financial literacy is causing stress and anxiety among millennials (who, remember, now account for 40% of the adult population).

For the rest of the article, click here.

The Rise of the Robo-Advisers?

The robots are here. Not the humanoid versions that you see in Hollywood movies, but the invisible ones that are the brains behind what look like normal online front-ends. They can educate you, advise you, execute trades for you, manage your portfolio and even earn some extra dollars for you by doing tax-loss harvesting every day. These robo-advisers also are not just for do-it-yourself or self-directed consumers; they’re also for financial advisers, who can offload some of their more mundane tasks on the robo-advisers. This can enable advisers to focus more on interacting with clients, understanding their needs and acting as a trusted partner in their investment decisions.

It’s no wonder that venture capital money is flowing into robo-advising (also called digital wealth management, a less emotionally weighted term). Venture capitalists have invested nearly $500 million in robo-advice start-ups, including almost $290 million in 2014 alone. Many of these companies are currently valued at 25 times revenue, with leading companies commanding valuations of $500 million or more. This has motivated traditional asset managers to create their own digital wealth management solutions or establish strategic partnerships with start-ups. Digital wealth management client assets, from both start-ups and traditional players, are projected to grow from $16 billion in 2014 to roughly $60 billion by end of 2015, and $255 billion within the next five years. However, this is still a small sum considering U.S. retail asset management assets total $15 trillion and U.S. retirement assets total $24 trillion.

What has caused this recent “gold rush” in robo-advice? Is it just another fad that will pass quickly, or will it seriously change the financial advice and wealth management landscape? To arrive at an answer, let’s look at some of the key demographic, economic and technological drivers that have been at play over the past decade.

Demographic Trends

The need for digital wealth management and the urgent need to combine low-cost digital advice with face-to-face human advice have arisen in three primary market segments, which many robo-advisers are targeting:

 

  • Millennials and Gen Xers: More than 78 million Americans are Millennials (those born between 1982 and 2000), and 61 million are Gen Xers (those born between 1965 and 1981); accordingly, this segment’s influence is significant. These groups demand transparency, simplicity and speed in their interactions with financial advisers and financial services providers. As a result, they are likely to use online, mobile and social channels for interactive education and advice. That said, a significant number of them are new to financial planning and financial products, which means they need at least some human interaction.

 

 

  • Baby Boomers: Baby boomers, numbering 80 million, are still the largest consumer segment and have retail investments and retirement assets of $39 trillion. Considering that this segment is either at or near retirement age, the urgency to plan for their retirement as well as draw down a guaranteed income during it is critical. The complexity of planning and executing this plan typically goes beyond what today’s automated technologies can provide.

 

 

  • Mass-Affluent & Mass-Market: Financial planning and advice has largely been aimed at high-net-worth (top 5%) individuals. Targeting mass-affluent (the next 15%) and mass-market (the next 50%) customers at an affordable price point has proven difficult. Combining automated online advice with the pooled human advice that some of the digital wealth management players offer can provide some middle ground.

 

Technological Advances

Technical advances have accompanied demographic developments. The availability of new sources and large volumes of data (i.e., big data) has meant that new techniques are now available (see “What comes after predictive analytics?”) to understand consumer behaviors, look for behavioral patterns and better match investment portfolios to customer needs.

 

  • Data Availability: The availability of data, including personally identifiable customer transactional level data and aggregated and personally non-identifiable data, has been increasing over the past five years. In addition, a number of federal, state and local government bodies have been making more socio-demographic, financial, health and other data more easily available through open government initiatives. A host of other established credit and market data companies, as well as new entrants offering proprietary personally non-identifiable data on a subscription basis, complement these data sources. If all this structured data is not sufficient, one can mine a wealth of social data on what customers are sharing on social media and learn about their needs, concerns and life events.

 

 

  • Machine Learning & Predictive Modeling: Techniques for extracting insights from large volumes of data also have been improving significantly. Machine learning techniques can be used to build predictive models to determine financial needs, product preferences and customer interaction modes by analyzing large volumes of socio-demographic, behavioral and transactional data. Big data and cloud technologies facilitate effective use of this combination of large volumes of structured and unstructured data. In particular, big data technologies enable distributed analysis of large volumes of data that generates insights in batch-mode or in real-time. Availability of memory and computing power in the cloud allows start-up companies to scale on demand instead of spending precious venture capital dollars setting up an IT infrastructure.

 

 

  • Agent-Based Modeling: Financial advice; investing for the short-, medium- and long-term; portfolio optimization; and risk management under different economic and market conditions are complex and interdependent activities that require years of experience and extensive knowledge of numerous products. Moreover, agents have to cope with the fact that individuals often make investment decisions for emotional and social reasons, not just rational ones.

 

Behavioral finance takes into account the many factors that influence how individuals really make decisions, and human advisers are naturally skeptical that robo-advisers will be able to match their skills interpreting and reacting to human behavior. While this will continue to be true for the foreseeable future, the gap is narrowing between an average adviser and a robo-adviser that models human behavior and can run scenarios based on a variety of economic, market or individual shocks. Agent-based models are being built and piloted today that can model individual consumer behavior, analyze the cradle-to-grave income/expenses and assets/liabilities of individuals and households, model economic and return conditions over the past century and simulate individual health shocks (e.g., need for assisted living care). These models are assisting both self-directed investors who interact with robo-advisers and also human advisers.

Evolution of Robo-advisers

We see the evolution of robo-advisers taking place in three overlapping phases. In each phase, the sophistication of advice and its adoption increases.

 

  • First Generation or Standalone Robo-Advisers: The first generation of robo-advisers targets self-directed end consumers. They are standalone tools that allow investors to a) aggregate their financial data from multiple financial service providers (e.g., banks, savings, retirement, brokerage), b) provide a unified view of their portfolio, c) obtain financial advice, d) determine portfolio optimization based on life stages and e) execute trades when appropriate. These robo-advisers are relatively simple from an analytical perspective and make use of classic segmentation and portfolio optimization techniques.

 

 

  • Second Generation or Integrated Robo-Advisers: The second generation of robo-advisers is targeting both end consumers and advisers. The robo-advisers are also able to integrate with institutional systems as “white labeled” (i.e., unbranded) adviser tools that offer three-way interaction among investors, advisers and asset managers. These online platforms are variations of the “wrap” platforms that are quite common in Australia and the UK, and offer a cost-effective way for advisers and asset managers to target mass-market and even mass-affluent consumers. In 2014, some of the leading robo-advisers started “white labeling” their solutions for independent advisers and linking with large institutional managers. Some larger traditional asset managers also have started offering automated advice by either creating their own solutions or by partnering with start-ups.

 

 

  • Third Generation or Cognitive Robo-Advisers: Advances in artificial intelligence (AI) based techniques (e.g., agent-based modeling and cognitive computing) will see second generation robo-advisers adding more sophisticated capability. They will move from offering personal financial management and investment management advice to offering holistic, cradle-to-grave financial planning advice. Combining external data and social data to create “someone like you” personas; inferring investment behaviors and risk preferences using machine learning; modeling individual decisions using agent-based modeling; and running future scenarios based on economic, market or individual shocks has the promise of adding significant value to existing adviser-client conversations.

 

One could argue that, with the increasing sophistication of robo-advisers, human advisers will eventually disappear. However, we don’t believe this is likely to happen anytime in the next couple of decades. There will continue to be consumers (notably high-worth individuals with complex financial needs) who seek human advice and rely on others to affect their decisions, even if doing so is more expensive than using an automated system. Because of greater overall reliance on automated advice, human advisers will be able to focus much more of their attention on human interaction and building trust with these types of clients. 

Implications to Financial Service Providers

How should existing producers and intermediaries react to robo-advisers? Should they embrace these newer technologies or resist them?

 

  • Asset Managers & Product Manufacturers: Large asset managers and product manufacturers who are keen on expanding shelf-space for their products should view robo-advisers as an additional channel to acquire specific type of customers – typically the self-directed and online-savvy segments, as well as the emerging high-net-worth segment. They also should view robo-advisers as a platform to offer their products to mass-market customers in a cost-effective manner.

 

 

  • Broker Dealers and Investment Advisory Firms: Large firms with independent broker-dealers or financial advisers need to seriously consider enabling their distribution with some of the advanced tools that robo-advisers offer. If they do not, then these channels are likely to see a steady movement of assets – especially of certain segments (e.g., the emerging affluent and online-savvy) – from them to robo-advisers.

 

 

  • Registered Independent Advisers and Independent Planners: This is the group that faces the greatest existential threat from robo-advisers. While it may be easy for them to resist and denounce robo-advisers in the short term, it is in their long-term interest to embrace new technologies and use them to their advantage. By outsourcing the mechanics of financial and investment management to robo-advisers, they can start devoting more time to interacting with the clients who want human interaction and thereby build deeper relationships with existing clients.

 

 

  • Insurance Providers and Insurance Agents: Insurance products and the agents who sell them also will feel the effects of robo-advisers. The complexity of many products and related fees/commissions will become more transparent as the migration to robo-adviser platforms gathers pace. This will put greater pressure on insurers and agents to simplify and package their solutions and reduce their fees or commissions. If this group does not adopt more automated advice solutions, then it likely will lose its appeal to attractive customer segments (e.g., emerging affluent and online-savvy segments) for whom their products could be beneficial.

 

Product manufacturers, distributors, and independent advisers who ignore the advent of robo-advisers do so at their own risk. While there may be some present-day hype and irrational exuberance about robo-advisers, the long-term trend toward greater automation and integration of automation with face-to-face advice is undeniable. This situation is not too dissimilar to automated tax-advice and e-filing. When the first automated tax packages came out in the ’90s, some industry observers predicted the end of tax consultants. While a significant number of taxpayers did shift to self-prepared tax filing, there is still a substantial number of consumers who rely on tax professionals to file their taxes. Nearly 118 million of the 137 million tax returns in 2014 were e-filings (i.e., electronically filed tax returns), but tax consultants filed many of them. A similar scenario for e-advice is likely: a substantial portion of assets will be e-advised and e-administered in the next five to 10n years, as both advisers and self-directed investors shift to using robo-advisers.

A Technology Breakthrough for Valuing Tangible Assets

What are your clients’ tangible assets worth? If you are like most advisors, you don’t have a clear answer. Without that clarity, you are leaving yourself and your clients at risk. Tangible assets – valuables ranging from fine art and wine to classic cars and jewelry – make up an ever-increasing portion of household wealth. Yet there is little visibility into this asset class.

Why? Often, individuals find the process of documenting, tracking and managing the values of tangible assets to be tedious. Instead of producing a thorough inventory, the insured may opt for a blanket umbrella policy that covers general contents as a percentage of the home’s value. The individual may list certain items, but with inadequate documentation. Many times, both the insured and the insurer fail to keep up as the market value of collections changes.

Fortunately, technology has emerged that makes collecting and managing information about tangible assets significantly easier. Appraisers can collect detailed data and provenance on property and possessions and upload them to a personal, online digital locker, where the items are regularly valued, securely managed, and are accessible anytime. Individuals will soon be able to use their smartphones to take a picture of a valuable object and upload it directly to this locker. As items are added and values change, the owner is notified – and can choose to automatically alert his advisors, including insurers and wealth managers, to ensure the items are accounted for and adequately protected.

The continuous transparency that the locker provides into values can be eye-opening to users.  Case in point: A family in the Northeast has a large, valuable art collection. Thirty years ago, the family had the pieces insured, using estate values provided by auction houses. These values, as a rule, are much lower than retail replacement values, so the family’s collection was initially insured at about half of what it should have been. The collection had not been appraised since the early 1980s, and, when a wealth manager had it re-appraised in 2012, values had changed so substantially that a piece initially valued at several hundred thousand dollars now carries a fair market value of more than $50 million.

The consequences of this type of undervaluation are significant. Had the owner passed away before the revaluation, the estate could have suffered an immense tax bill. In the event of loss, theft, fire or water damage, the owner would have been severely underinsured and faced significant loss. In addition, had the owners known the higher value of the artwork, they could have sold or leveraged it.

The bottom line is: With more information about their valuables, individuals  – and their advisors – can make more informed decisions.

This ability to capture, securely store and provide real-time valuations is a momentous step forward in tangible wealth management, and has been made possible by several technological advancements:

1. Data About Prized Possessions
There is a massive amount of data now available on luxury items. Whether a person’s passion investment is wine, diamonds, classic automobiles or fine art, there is a database that captures the real-time value changes in the category. By using technology to process that data, individuals gain a better composite view of their wealth, a greater idea of potential liquidity options, and a more accurate way to assess risk.

2. Digital Collection — Onsite and at Retail
In the not-so-distant past, a person had to take pictures or videos and store them on a hard drive, keep receipts in a safe deposit box, and use a spreadsheet to capture information on valuables. Now that all communication and record keeping has gone digital, certified appraisers can use apps to capture all of this information on-site. Merchants can email electronic receipts. Individuals can snap a picture of any acquired item, add support information like a receipt, package art, or bar or QR-code and send it to their personal digital locker in real time. All of this information is securely accessible anytime, anywhere.

3. Cloud Storage and Connectivity
Once information is collected electronically, it can be safely and securely stored in a personal digital locker in the cloud. This eliminates the need for paper records or other media that can be lost, stolen, or destroyed.  In addition to storage, the cloud provides connectivity, creating a virtual ecosystem where individuals can privately view the value of their tangible assets and manage those assets. This new capability includes easy connections to on-line auction houses, dealers, insurers, wealth manager and the like to sell, insure, donate, or take other beneficial actions powered by information about everything a person owns.

Ultimately, data is currency, and new technology is helping individuals cash in on the data about their tangible wealth. The information about possessions has inherent value. By adopting emerging technologies to collect, value and connect the information about individuals’ personal property, individuals and their advisors can finally gain transparency into tangible assets – completing the total wealth picture.

The Great Recession And My Business

For many closely-held and family business owners, 2008 and 2009 was a stressful period. The volatile market followed by the Great Recession often produced

  • a contraction of business revenue;
  • the loss of profitability;
  • the reduction in value of their companies;
  • the aggressive and often not rapid enough implementation of business and personal cost-cutting measures;
  • the layoffs of far more employees than these companies imagined might be necessary;
  • the reduction of personal asset values;
  • the reduction of owner pay and employee pay levels;
  • the liquidating of owner personal assets to capitalize the business;
  • the development of tenuous relations with their banks;
  • a need to reinvent their business offerings in the marketplace; and,
  • the concern about being able to meet their future financial goals.

Plus, the stress of all the previous mentioned events produced the most burdensome time of our business and personal lives. I, in fact, can say there were several occasions in 2009 when I called to reach a business owner client mid-workday to find that I reached them at home while they were nursing a stiff drink. To compound all this, while most baby boomers do not own businesses, most of our clients who own businesses are baby boomers, and the age in relation to retirement, personal savings, and lifestyle spend factors that make retirement a challenge for most baby boomers are often compounded for our business owners.

I had many a conversation with an owner who confided in me that they built their company, and would build its value again, but they were tired. Because the recession induced exhaustion, they felt that they only had the energy to build it one more time. As a result, they wanted to be very proactive and intentional about planning to maximize the business' value and minimize taxes upon their transition out of the business. It is in this regard that the development of a Business Transition Plan is of paramount importance. The development of a Business Transition Plan involves multiple steps:

  1. Identifying the owner's financial and timing objective for the transition out of the business.
  2. Assessing the business and personal resources available to help contribute to the owner's objectives.
  3. Developing and implementing strategies that will contribute to maximizing and protecting the value of the business.
  4. Evaluating the opportunities for ownership transition of the business to third parties.
  5. Evaluating the opportunities for ownership transition of the business to inside parties.
  6. Developing business continuity measures to protect the business and the owner's family from the loss of a key owner or employee.
  7. Developing a post-transition plan for the owner that aligns with their Legacy objectives, including lifestyle objectives, estate planning, philanthropy and family relationship enjoyment.

Let's look at each of these in greater detail.

Identifying the owner's financial and timing objectives for the transition out of the business: For most business owners, the transition out of their business will be the single, most significant, financial event of their life. Identifying when and how much the owner desires is the first step in the planning process.

Assessing the business and personal resources available to help contribute to the owner's objectives: In order to evaluate if the owner will be able to meet his or her financial objectives, we believe we must start by developing a personal financial plan for the owner(s). This plan takes into account the reality that both business value upon transition and personal wealth accumulated during the operation of the business, combined, will together finance the lifestyle of the retiring owner. The more efficiently a person manages their non-business wealth prior to exiting the business, the less pressure it places on the value obtained from the business upon exiting.

Developing and implementing strategies that will contribute to maximizing and protecting the value of the business: In my many discussions with business owners, I often conclude that the owner believes their business is worth more than it really is. One of the most beneficial things a business owner can do to maximize and protect business value is operate in a constant state of planning and operations as if their business is “For Sale.” By evaluating all of your company's planning and operations in alignment with this premise, an owner can proactively manage the investment in their business. These planning and operational strategies often include:

  • Development of non-owner management.
  • Implementation of Buy-Sell Arrangements between owners helps protect owners, and their heirs, from the termination of employment, death, disability, or divorce of an owner. Though not every risk in a business can be insured for, death and disability can and often should have insurance policies implemented to finance the buy-sell.
  • Business Dashboard Metrics of sales and profitability.
  • Task functionality planning within the business.
  • Maintaining sufficient capitalization within the company for growth and banking purposes.
  • Maintaining appropriate amounts of key-person insurance on valuable company personnel to protect the company from the loss of an owner, or key-employee, and the financial burden that can result. Examples of this burden can include loss of revenue, reduction in profitability, cost of hiring a replacement, or default of or risk to credit facilities. In the midst of a crisis, I don't believe it's possible to have too much cash.
  • Formalizing appropriate compensation agreements with executive management, including golden-handcuff incentive compensation plans.
  • Maintaining a certain level of outside audits of the company's financials.
  • Recognizing when family should not be running the business and hiring professional outside management.
  • Consistently reviewing customer contracts to maintain the most favorable terms for your company.
  • Maximizing tax reduction planning opportunities on corporate profit, and at the time of a business ownership transition.

Evaluating the opportunities for ownership transition of the business to third parties: Many businesses are good candidates for a sale to a third party. These third parties often come in the form of a Strategic or Financial Buyer. The Strategic Buyer is often a competitor, or non-competitor that desires to enter your geographic market or industry, and sees your company as a lower cost or more rapid pathway to entry. The Financial Buyer typically comes in the form of a private equity group that owns another company that, when combined with some aspect of your company's offering or value, can acquire or joint venture with your company's offering to multiply the value of both companies within the private equity group's portfolio.

Either of these alternatives can produce an excellent financial transition windfall to a selling business owner, assuming the selling owner's company is clean. When an acquirer performs its due diligence, if it finds that the company hasn't been operationally managing itself in a professional manner as mentioned, hasn't applied consistent accounting principles, doesn't have a deep management bench, or depends upon the owners for ongoing revenue or profitability, the value it will pay in a transaction plummets.

Evaluating the opportunities for ownership transition of the business to inside parties: Whether your transition intentions are to transfer ownership to heirs, key employees, or the employees as a whole through an Employee Stock Ownership Plan (ESOP), assessing the skills and leadership capabilities of your successors is as important as the development of your ownership transition plan.

A successful transition plan requires the implementation of both Leadership Succession Planning and Ownership Transition Planning. One without the other greatly increases the potential for a failed transition. Once both have been designed, it is then important to evaluate what ongoing role the current owners will maintain through the transition, and the timetable of the transition.

Unlike a 3rd party sale, with an internal transition, the owner's gradual departure often helps facilitate the smoothest transition of Leadership Succession, while the owner can ease into retirement with the benefit of continuing to receive compensation during the transition, distributions of profits, implement gifting strategies, receive seller-financed note payments, or benefit from other strategies, thus lightening the burden on the owner's personal financial assets post departure.

Developing business continuity measures to protect the business and the owner's family from the loss of a key owner or employee: Despite the implementation of intentional planning, life can bring surprises. The premature death of an owner or key-employee, a disability or incapacity, the recruitment of a key employee by a competitor, can all derail the good planning, revenue stability, or corporate profitability.

Every good transition plan should address the need for Buy-Sell Agreements to protect owner personal finances, cash out the family of key-employee minority owners, permit the next generation to purchase the company from the previous owner at its current value before it grows further, reap the benefit of any Step-Up in Basis deceased owner's estates receive at the time of death, and benefit from the income and estate tax-free liquidity that properly designed and owned life insurance policies can provide the business and its family owners.

This planning can also present an excellent opportunity to utilize life insurance liquidity to fund the buyout of next generation family heirs who may not desire to stay in the family business, but otherwise the business might not have the funds to initiate these realignments of ownership.

Developing a post-transition plan for the owner that provides for their post exit Income and Wealth Management needs, and aligns with their Legacy objectives, including lifestyle objectives, estate planning, philanthropy and family relationship enjoyment: For many owners, their lifestyle, hobbies, net worth, and self-esteem is wrapped up in the business. The transition out of the business can be a stressful one.

Many of our clients find this transition to be an opportunity to develop a new personal life mission statement, having experienced great success in life, now focusing on what they desire their Legacy to be. This Legacy planning may involve an increased participation in philanthropy, spending more time with family, possibly even stepping into a new “missional” career. This change in life focus is only possible if post retirement Wealth Management provides for ongoing stable income, which we believe is more important in creating financial independence than a client's net worth.

However, the long-term potential threat of inflation, current low interest rates, increasing U.S. Federal debt, deficit spending and stimulus spending can present major obstacles for the retiree to generate sufficient income when developing a “traditional” post-retirement wealth portfolio. It is for this reason that we approach personal financial planning from a “non-traditional” perspective as we evaluate and recommend investment options beyond stocks, bonds, mutual funds and ETFs and also focus on the tax-efficiency of Wealth Management as it is not “how much you make,” as much as it is “how much you keep.”