Economic turmoil raises demand for cool thinking

Life's been anything but dull these days for those who preach the virtues of disciplined saving and stoke the software models that light the path to a comfortable retirement.

Massive stock market gyrations have the jangled nerves of investors, who can't seem to find appetizing returns in many safe haven investments or stocks that maintain a comforting upward trajectory.

Reduced investment returns combined with stagnation in real estate prices to make the goal of retirement seem increasingly elusive.

Certified financial planners such as Jan Beal at WinnerLynk Advisory Group in Hiawatha, a member of Securian Advisors MidAmerica, and Gary Speicher at Financial Planning Services in Cedar Rapids have been working overtime to keep existing clients' confidence up and meet with new customers. So has Jeff Johnston, a chartered financial consultant and president of Premier Investment of Iowa, who works closely with Speicher.

Beal said she's spent much more time addressing the concerns of clients recently and has received more referrals.

Market anxiety is the common denominator with many of those contacts. After a day of meeting with clients, Beal often feels like her clients' anxiety has been lowered, but it's as if she's absorbed it.

“I usually work it out with exercise after I get home,” she said.

Johnston and Speicher began hosting a Wednesday night radio call-in show on WMT-FM Radio in March 2009 that they believe gives them an extra window into investor sentiment.

Many investors they've spoken with want to halt or slow down the pace of their investing, but Johnston and Speicher say the times of greatest market anxiety are often the best times to invest.

“People say, ‘Hey, I'm waiting for things to settle down,'” Johnston said. “I tell them, ‘You're going to be waiting a long time.'”

Indeed, Speicher and Johnston noted, there's almost always a reason not to save and invest.

“It's our job to show clients a good reason why they should invest,” Johnston said.

The messages they offer on their radio programs are fairly consistent - they espouse a disciplined saving and investing philosophy using a “bucket” system for segregating assets.

The three buckets of the system are current income, liquidity for investing purposes, and long-term growth. Johnston said investors should tend each bucket differently, but short-term market fluctuations have hardly any bearing on the largest bucket - growth.

Instilling financial discipline remains a big part of Beal's financial planning practice. Roughly 60 percent of the clients who come to her are far behind in their retirement savings. As a result, she says the initial preparation of a financial plan can be somewhat jarring.

Financial planners collect information on client income flows, spending needs and retirement objectives, along with a vast array of other data. The plan often yields what Beal calls a “pinch goal” of squeezing out non-essential expenditures or boosting income to put more money aside for the future.

Beal counsels clients to more closely differentiate between wants and needs in their spending.

“As a society, we have lost that idea of ‘paying ourself first,'” Beal said.

That kind of direct and highly personal advice often separates financial planners from other types of financial advisers who mainly sell financial products. Over the course of a relationship that can last decades, Beal said she becomes closely acquainted not only with her clients' finances, but how they interact with other life situations and goals.

In one of the more extreme cases, Beal said she even advised an out-of-state client who was unhappy in his medical practice to sell it and pursue a more fulfilling occupation.

“Work stress shortens their life,” said Beal, who writes and occasional column on financial planning for Business 380.

Filtering out distracting media messages is advice common to Beal, Speicher and Johnston, who say most of what the media reports - on the short-term gyrations of the markets - has no bearing on long-term results.

Speicher and Johnston said they don't allow cable financial programs on the television in their reception area, preferring instead to offer hunting and fishing shows. They share Beal's regard for financial planning as a tool to improve quality of life, not diminish it.

The web has played a bigger part for financial planners in getting out their message in recent years. Speicher, Johnston and Beal all use the web to communicate with clients, and the WMT radio show hosted by Speicher and Johnston is even available for podcast downloads on the Premier Investments of Iowa website.

The 23,800 member Financial Planning Association issued a statement in early August after the markets were shaken by Congressional inaction on spending authorization, the Standard & Poor's downgrade of United States and the European debt crisis. The group's leadership said the market overreacted based on emotion and political views.

“An investment plan is to make it easier to know what to do in times like these,” said Dave Yeske, a former association president and managing director of Virginia-based Yeske Bue financial planners. “ It's usually better to be resilient than nimble. The way to survive and thrive through all the inevitable ups and downs in the market is to save and invest, diversify and rebalance, and maintain prudent reserves.”