When we think of wealth management, we typically think in terms of accumulation—building a nest egg. But what happens when accumulation stops and distribution starts? To answer that question, wealth manager, speaker and author David Rosell suggests we think of Mount Everest. Although reaching the top of the world’s highest mountain may seem like a mountaineer’s ultimate goal, any climber knows that 80 percent of the climbing accidents and deaths occur on the descent.  With this chilling statistic in mind, climbers will tell you that their objective is to reach the summit and get back down alive.  Investing is no different.

“In climbing, the second half of the journey involves the greatest risk and requires the most planning,” states Rosell, President of Rosell Wealth Management. “Similarly, the riskiest time for investors is the second half of the financial journey—when you stop adding to your 401(k)s and now need to live off them for three-plus decades. So that’s the period when, just like climbing, you’ll need the most planning.” 

The expertise that a wealth manager needs during the money-accumulation phase is very different than the expertise one needs for clients in the wealth-distribution phase. That’s where Rosell, whose clients are at or near retirement age and have already amassed their wealth, comes in.

“My clients know what their net worth is, but they have very little idea of what that money can or can’t do for them during the rest of their lives,” he explains. So right off the bat, he creates a blueprint that informs his clients whether they can actually live the life they have imagined in their years of financial independence or whether they need to make adjustments.

“We try and educate our clients that rather than compare their worth to an arbitrary index benchmark,” says Rosell. “Instead of using the S&P as a point of comparison, it’s really time to benchmark their beach house. By that, I mean the lifestyle they are looking for.”

Rather than seeking returns, as his clients have been accustomed to doing during the accumulation phase, Rosell recommends ensuring lifestyle sustainability over rate of return during this distribution phase. He explains how every percentage point of return sought exposes the individual to exponentially more risk over the years.

“Although we have to outpace inflation by a nice margin, one of the things I tell clients is that the return of their money is even more important than the return on their money,” Rosell says.
While retiree hot-topic issues like long-term care expenses continue to be pressing concerns, Rosell no longer advocates traditional long-term care policies. Too many companies are now raising premiums on policy holders, often resulting in retirees needing to drop their coverage and lose premiums already paid just when they most need coverage.

Instead, Rosell prefers new, innovative options that allow the return of premiums either through covered expenses, death benefits or refund options. “There’s a lot more flexibility and freedom, along with guaranteed rates that aren’t going to increase over time.” His books present these kinds of options, along with other critical financial information.

In his first book, Failure Is Not an Option, Rosell draws on his vast travel experiences to provide entertaining anecdotes and money-related insights for those in the second phase of wealth management. His forthcoming book, scheduled for release in 2016, will focus on the initial phase of financial planning, or the ascent, and is geared toward a younger audience who, he says, are not being taught financial literacy soon enough. Just like his first book, he’ll use a host of exciting travel stories to drive home his financial lessons.

Rosell’s books on financial education are undoubtedly the most entertaining you’ll ever read. After reading his story about the Australian outback, you’ll never question the need for solid financial planning again. In his new book, a story about flying over Victoria Falls, Africa in an Ultralight will reinforce the benefits of having a different perspective from above and the importance of obtaining guidance from a trained instructor in a similarly unforgettable way—a little sugar to help the medicine go down.

For more information visit: www.davidrosell.com