chalk talk | PLANADVISER October/November 2012

Command Performance

Where all advisers must play a part

By Steff C. Chalk | October/November 2012
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Retirement plan advisers are more than bit players in the never-ending drama of how to manage plan participants’ expectations. We are center stage, incessantly judged under a harsh spotlight of “What have you done for me lately?” as we scramble to keep the story moving to everyone’s satisfaction.

The adviser today must contemplate each participant’s time horizon through the prism of retirement readiness. And he must now also factor into his model a fast-approaching fiscal “cliff-hanger,” with all the uncertainty and implications of the Mayan calendar.  

Decisionmaking Theory 

There are decisions to be made. Some are macro-oriented; some are micro-level, yet they need to be made by a retirement plan adviser. Some of these investment decisions are to be made in the face of relative certainty, yet the majority are to be made under the cloak of uncertainty. In a time such as this, does the adviser rely upon the Book of Normal Return Distributions or the School of Hard Knocks, where “participation certificates” were earned by anyone who serviced clients through either the last quarter of 1987 or the fall of 2008? (For those who can recall the oil embargo of 1973, that event also qualifies one for a participation certificate. Although much was taught, very few lessons were actually learned, as evidenced by today’s lack of any real energy policy.)