CHICAGO--(BUSINESS WIRE)--Fourth graph, first sentence of release dated December 8, 2011, the designation “RIA” should not appear after Stewart Mather's name.
The corrected release reads:
THE MATHER GROUP: WHO IS MANAGING YOUR RETIREMENT NEST EGG?
Is it possible to gain a secure and successful retirement despite the ongoing economic uncertainty?
Many people planning for retirement are grappling with this question in light of the continuing grim economic news. From a sluggish U.S. economy with high unemployment to Europe’s debt crisis, there’s no question that the current economic landscape has many investors worried.
Adding to the economic gloom are the massive changes within the investment industry over the past few years, making it more complex and confusing. Wall Street investment houses have become multi-faceted financial giants with hands in many – some say too many - financial pots. At the same time, even the largest banks and investment firms have proven they’re not too big to fail.
All of this external “noise” can make it difficult for retirement investors to stay focused on their end goal of a secure retirement, according to Stewart Mather, CFP®, CIMA, who leads the retirement investment advisory firm, The Mather Group, Inc. (www.themathergroup.com). “This is definitely not the time to freeze in the headlights and do nothing,” he says. “But it is the time to make a positive change as 2012 approaches to help ensure that your retirement nest egg is protected and managed by advisors who are 100 percent on your side.”
Most people are confused by the many names and titles used by people who claim to be professional investment consultants or advisors, according to a 2011 survey commissioned by the U.S. Securities and Exchange Commission, which oversees the financial services industry. But as another tumultuous economic year comes to a close, it may be the right time to examine exactly who is managing that nest egg.
There are two key groups of players in the industry: Registered Investment Advisors (or RIAs) and broker-dealers, like the “money managers” and stock brokers typically found in large investment firms and banks. It’s important to know how these two key groups differ to determine who you should trust with their investments.
A broker-dealer is basically a salesman who promotes and sells investment products such as stocks and bonds. The broker-dealer receives a commission – a percentage of each sale – whenever a product is sold to an investor. The more they sell, the greater their income. By law, broker-dealers are not required to act in their clients’ best interests; only to do what is considered “suitable” for their clients. “Many products can be deemed ‘suitable’, so why wouldn’t the broker-dealers sell the products that put the most money in their pockets? That’s a problem,” says Mather.
Fee-based Registered Investment Advisors (RIAs) on the other hand, make no money at all on commissions. They are paid for their advice and management skills. Most importantly, RIAs are held to a higher “fiduciary standard” than dealer-brokers, which means that RIAs must, by law, do only what is in their clients’ best interests. Thus it is in the RIA’s best interest to provide superior service and results. Talk continues in Washington as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 about creating a uniform fiduciary standard that would bring broker-dealers up to the RIAs’ higher standards. But change is not yet on the foreseeable horizon.
A growing number of individual investors are leaving big investment houses for RIAs, says Mather. He believes the exodus from the large Wall Street firms is due to investor frustration and distrust over what they perceive to be questionable practices. The trend will continue to accelerate, Mather predicts. “The fact is that the big investment houses are in business to maximize their profits which may not be in the best interest of the individual investor,” he says.
No one understands this better than Mather whose own growing discontent working for a big investment house became his impetus to leave a large investment bank and launch The Mather Group, taking his investment team and 99 percent of his clients with him.
The Mather Group Inc., work on a fee-only basis, developing and managing retirement investments that reflect each individual’s personal retirement goals. They make no money on commissions. “It’s in our best interest to provide exceptional service to our clients because satisfied customers are our only source of income. When our clients succeed, we succeed,” he says.
Anyone considering a Registered Investment Advisor should look closely at the firm’s track record and the credentials of the people managing their money. Mather also suggests asking some less obvious, but equally important questions to help ensure your retirement nest egg ends up in good hands.
Volatility is the new normal
Any retirement plan must factor in economic volatility. Ask how your advisor intends to harness volatility to protect your investments and further your goals.
We’re not in Kansas anymore
Today’s economic climate is nothing like it was 10 years ago. It used to be that a recession meant one segment of the market would be hit while other segments held up. The new trend is a correlated response – all segments down at the same time. Ask how your advisor is managing this new economic norm.
Stress test your retirement portfolio regularly
Ask if and how your advisor will stress test your portfolio on a regular basis, especially on the final five-year approach to retirement to assure you are on track no matter what the economy throws at you.
“A successful retirement is one that is well-planned and managed so you can do what you want, on your terms,” says Mather. “Our goal is to get people there, no matter what else is happening in the world.”
The Mather Group is an independent, fee-only retirement investment advisor utilizing Fidelity Institutional Wealth Services as its custodian. The firm serves the Chicagoland market from its state-of-the art office located at One Tower Lane, Suite 1820, Oakbrook Terrace, IL 60181.
As Managing Partner of The Mather Group, Mather sets investment policy, directs portfolio management and oversees retirement planning strategies. Other team members bring more than a century of wealth management experience to the firm, providing financial guidance through many economic cycles.