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Jack Martin

The Wealth Manager’s Perfect Storm of Risk (Part 2)

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If you missed Part 1 of The Wealth Manager’s Perfect Storm of Risk, click here.

One of our biggest jobs as wealth managers is to protect our clients from unnecessary risk. The tools we use to diversify, allocate, rebalance and tax harvest have radically evolved in recent years.

In Part 1 of this blog series about risk, we talked about the “Perfect Storm” created by 3 intensifying risks that will impact your aging clientele’s retirement outcome:

  1. The 8-Year-Old Bull Market
  2. The End of the Bond Bull Market
  3. The Hidden Risks of Longevity

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Jack Martin

The Wealth Manager’s Perfect Storm of Risk (Part 1)

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This month the bull market marked its 8th anniversary. But as the Wall Street Journal reported March 8th, “Stocks Have Tripled Since Crisis, but Low Rates Are Still Squeezing Savers.”

Retirees have reacted to low interest rates by opting for higher-risk investment strategies, exposing themselves to volatility and sequence risk in an effort to make sure they don’t outlive their assets.

This week the Fed began to ratchet up rates. This might mark the end of the bull market in bonds. The Fed’s actions expose those retirees’ remaining fixed allocations to risks associated with rising rates.

And on top of sequence and interest rate risks, longevity risk may be the most difficult to communicate and manage.

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