Broker Check
 

Understanding Retirement's Three-Legged Stool

| July 19, 2018
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Most people will depend on three sources of income in their retirement: Social Security, benefits provided to them from your employer, and their personal savings. However, most are not sure how much they will need to live on in their retirement, and even worse - most of them underestimate the amount of money they'll need. Watch as EBW's Bryan Beatty explains where and how people should look for education on the important topic of retirement. Beatty, a partner with Egan Berger & Weiner LLC, was recently named one of Financial Times Top 400 Financial Advisers for 2018.* 

This segment originally appeared on Channel 8's Let's Talk Live program. 

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*Methodology

The Financial Times 400 is intended to provide a snapshot of the best financial advisers for the investors who use them — such as FT readers. We assess advisers based on what investors care about, and we use a quantifiable, objective methodology.

The Financial Times and Ignites Research, the FT’s sister company, contacted the largest US brokerages in autumn 2017 to obtain practice information and data for their top advisers across the US. This resulted in verified data on assets under management instead of relying on advisers’ self-reported figures.

We asked for information on advisers with more than 10 years’ experience and who had more than $300m in assets under management. Such minimum criteria filtered out most advisers. The FT then invited qualifying advisers out of this group — a list that totaled about 880 — to complete a questionnaire that gave us more information about their practices.

We added that information to our own research on the candidates, including data from regulatory filings. The formula the FT uses to grade advisers is based on six broad factors and calculates a numeric score for each adviser. The factors are:

  1. Assets under management can signal experience managing money and client trust.
  2. AUM growth rate (we look at both one-year and two-year growth rates) can be taken as a proxy for performance, asset retention and ability to generate new business.
  3. Years of experience indicate experience managing assets in different economic and interest-rate environments.
  4. Compliance record provides evidence of past client disputes. A string of complaints could signal problems.
  5. Industry certifications (CFA, CFP etc) demonstrate technical and industry knowledge and obtaining these designations shows a professional commitment to investment skills.
  6. Online accessibility illustrates commitment to providing investors with easy access and transparent contact information.

 Assets under management accounted for an average of 70 per cent of each adviser’s score. AUM growth rate accounted for an average of 17 per cent.

Additionally, the FT places a cap on the number of advisers from any one state that roughly corresponds to the distribution of millionaires across the US.

We present the FT 400 as an elite group, not a competitive ranking. We acknowledge that ranking the industry’s top advisers from one to 400 would be a futile exercise, since each takes different approaches to their practice and has different specializations. The research was conducted on behalf of the Financial Times by Ignites Research, a Financial Times sister publication.

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