Article originally published in Registered Rep Magazine
February 2008
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Sink or Swim

Stephen D. Gresham is executive vice president and head of retail markets for Phoenix Investment Partners. He is the author of Advisor for Life (Wiley 2007).


Sink or Swim
by Stephen D. Gresham

I was watching a TV documentary recently about a middle-aged man who was preparing to swim the English Channel. A reporter asked him why he had chosen to undertake this particular challenge — especially since the man, a popular TV comedian, was not known to be a swimmer or even much of an athlete. The man said that when he was a boy, he saw a television program about a man who swam the Channel, and decided then and there that it was something he too would like to do. “It became a goal of mine,” the man explained. “Now seems to be the perfect time, because I don't have much else going on at the moment.”

He didn't make it. He hadn't trained properly, he'd underestimated the physical effort required, and I think it's safe to say his heart really wasn't in it. As he climbed into the boat less than halfway across the Channel, he smiled and shrugged. “I tried,” he said sheepishly. Asked if he would make another effort after further training, he said, “Maybe.”

You probably expect me to use this example to illustrate why so many people fail to reach their retirement goals: They wait too long to start saving, they underestimate their post-employment financial needs and so on. Those are valid points, to be sure, but hardly revolutionary or insightful. No, what struck me most about this swimmer's failed attempt was his repeated use of the word “goal” as if it were synonymous with whim or fancy — not something to be taken too seriously, but something to think about when there aren't other more pressing concerns; a luxury, not a necessity.

Now comes the part about retirement planning and wealth management. How many of your clients and prospects think of their retirement goals in much the same way, as a sort of future wish list that has little, if any, bearing on their present life circumstances? Probably more than you realize. Pundits often note that putting a goal in writing is the first step toward its fulfillment, yet the 2007 Phoenix Wealth Management Survey found that only about a third of affluent households (defined as those with net worth over $1 million, excluding debt and primary residence) have a written financial plan. Do these affluent families have goals? Undoubtedly. Are they serious about achieving those goals? Maybe. Maybe not.

Many advisors suggest to their clients a wide range of very desirable retirement possibilities: playing golf or tennis every day, dining out with friends every evening, traveling the world or getting involved in philanthropy. Who wouldn't want to claim these lifestyle options as goals? The reality is that few will achieve these things unless they rethink what it means to set and work toward a goal. Until specific interim objectives are established, the goal is nothing more than a fantasy-something that may or may not eventually happen.

Rather than instructing clients to think of retirement goals, we should emphasize the inevitability of retirement, and instruct them to think now in terms of future retirement liabilities. “Liability” is an unfortunate term given its negative connotation, but negative associations can spur positive results. In fact, sometimes the fear of negative consequences is more powerful than the hope for positive outcomes.

The start of a new year is traditionally a time when people take stock of their lives and vow to make changes: lose weight, get in shape, finally finish The One-Minute Manager, start saving — really saving — for retirement, etc. But numerous studies have shown that the overwhelming majority of people abandon their resolutions before the New Year is very old. “I tried,” many of them will say, echoing the statement of the would-be Channel swimmer who waited too long and failed to properly train. Life may be a journey, but retirement is a destination. Make sure your clients have everything they need by the time they arrive.

Writer's BIO: Steve Gresham is executive vice president and head of retail markets for Phoenix Investment Partners. He is the author of Advisor for Life (Wiley 2007). Contact him at greshamcompany


While her two older children were married, had children and were living independent lives of their own, Adelaide, a widow in her early 60s, had to decide how to deal with Jim, 19, once a very promising college student. A skiing accident had left him with permanent mental limitations. She had barely recovered from the loss of her husband from a sudden heart attack when the call had come that Jim was being airlifted to the regional trauma center.

Now, many months later, she had to decide on a long-range plan. Although Jim had done well in rehabilitation and his left-sided spastic muscle weakness improved, his thinking and behavior were still severely impaired. There seemed to be no probability that he would ever be able to live on his own. The social worker had made it very clear: "You will have to decide, Mrs. Newton, whether to keep Jim at home with you or start looking for a long-term placement." At the time, Adelaide had smiled and nodded. Now, she resented the fact that she had to cope with this alone. She had searched for another solution but now knew that the social worker was correct, she would have to develop a plan.

During this trying time she had become very familiar with the singular burden borne by the parents of a severely handicapped child not just those with TBI, like Jim, but children with congenital anomalies and disabling conditions of all sorts. Some were less severe than others but they all were life-changing responsibilities for parents who had never expected to be confronted by such a challenge. Adelaide learned about SSDI, Medicare, Medicaid, groups homes, special schools, sheltered workshops, support groups, respite care and devoting the remainder of one's life to the caregiver role. She had not, however, been able to decide which route to take.

It suddenly occurred to her that a college classmate had faced a similar fate with a young daughter due to an automobile accident. On an impulse, she looked up the number in the alumni directory and called.

After a few reminiscences, Adelaide revealed the true purpose of her call. Her friend was empathetic but curt. She had obviously "been through the wringer" with her own problem and family. "Adelaide," she said, "quit dithering. Get out and get as much advice from knowledgeable sources as you can find. Then sit down, list your options and, with appropriate help, assign a cost figure to each. Once you feel ready, make your choice. There is no other way."

Big Challenges, Big Rewards

Families with special needs children are remarkable in many ways. Their profound responsibilities force them to be financially astute decision makers with both short-term practicality and a long-term vision in mind. They are constantly challenged by the need to juggle shifting priorities out of their control as dictated by the needs of their child. And most significantly, there is no end to their job.

The caregiving family has the attributes of the ideal client for your practice. Your responsibility is to share that focus. Connected as they are to other families similarly challenged, the network created by their common issues both bonds and protects the families. You can be either a valued provider or dropped like a hot potato, depending on your level of service and empathy.

Building the Relationship

Assuming you meet the family after the care situation has developed, there are three primary phases of your relationship nd your level of responsibility:

Acute Phase

Early on you must assess all known and potential risks to both the child and the caregiver. Action items:

  • Life insurance on the caregiver sufficient to guarantee special needs are met

  • Disability insurance on the caregiver

  • Advance directives for care of the child, including naming both medical guardian and financial trustee (not the same person)

  • Establish a trust to own the existing assets, if substantial and/or to own the life policy

Care Phase

  • Health saving accounts and medical savings accounts as available

  • 529 plans for educational opportunities

Long-Term Care Phase

  • Life insurance for the child, subject to condition and availability

  • Longer-term savings via trust in the event of the caregivers demise

  • Long-term care for the caregiver

  • Locate continuous-care retirement facility (pre-funded)

The increased longevity of both special needs children and their parents force a level of planning unknown to past generations. Your assistance is invaluable and will become known across a network of families. Beyond your income, service to these remarkable families will compensate your soul.



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Steve Gresham PO BOX 1307 Madison Connecticut 06443
Telephone 203.245.3141 sgresham@greshamcompany.com