"As the owner, you discuss risk with me, and we'll talk about how we can win the game conservatively or moderately, but it's up to me to pick the players," says the financial consultant and program manager at Family Trust Federal Credit Union in Rock Hill, S.C. (LPL is the third-party marketer.)
That style has worked with even his toughest clients, from those whose advisors took their money-he's met a surprising number of people who have experienced this problem-to those who have lost their retirement savings when an employer restructured.
Take the airline pilot who came to Griffin after his airline declared bankruptcy and his pension dropped from about $15,000 per month to $5,000. He also had a $250,000 portfolio that collapsed to around $100,000 because of investments in Internet companies.
His goal of retiring in 10 years? Not exactly heading into clear skies. But Griffin offered him two flight plans — either sacrifice his lifestyle now and sock more funds away, or work longer, although he would have to change industries because of mandatory retirement ages for pilots.
The client and his wife chose the former option, selling their home and downsizing to an apartment. They also canceled their country club membership.
Griffin then took the remaining assets, plus new deposits the pilot started saving, and invested them conservatively, concerned that his client wouldn't be able to weather another downturn.
"Clearly, everything had to be adjusted, he was essentially starting over," Griffin added in a follow-up email message.
Today, many advisors are working with investors who have endured the last several years putting off retirement planning because of the economy, or because they watched their life savings and dreams dissipate. Perhaps a family business closed. Or a 401(k) hit hard by the downturn made them pull the covers over their heads. Or retirement plans got postponed until children were out of college. Or clients hit 50 and found themselves looking for work again.
These are scenarios that experts say are unique to the modern day as jobs were generally steadier in previous generations.
Labor statistics show that 50 year-old workers in a private sector job in 1983 could count on having that job until retirement, says Dr. Steven Sass, the program director of the Financial Security Project, an initiative of the Center for Retirement Research at Boston College.
Indeed, about 70% of people who were employed in the private sector when they were 58-62-years-old, in 1983, were at the same job they had held at the age of 50. Just 25% held a new job and 5% were working part-time. Sass says today those numbers are closer to 50/50 — that is, half of 60-year-olds are likely to be working for a new employer, if they can actually find one.
Advisors say they are hearing from more prospective clients in this category: People who are hoping to learn how they can get ready to retire and discovering that in many cases it's going to be a rough road.
The process includes sitting down with them and looking at how to maximize options from Social Security to 401(k)s, of course, and then looking at investment vehicles from Roths to variable annuities, mutual funds to ETFs. But sometimes it also means helping clients shift the way they think about the future they had envisioned when they thought about those so-called golden years.
What's Your Pain Threshold?
To Griffin, understanding where a client's pain point is also helps him determine how aggressively he can position a portfolio to try and make up for lost time — and potentially bring retirement a little closer.
He finds most clients don't understand what he means when he explains a portfolio could be down 20%.
So again, he brings out the analogies: A $100,000 account dropping to $80,000 means losing a new Honda Accord. Dropping 70%? That's a Volvo.
He looks for non-verbal clues to read his client's feelings. Knees bouncing up and down are a classic sign of discomfort. He waits until they get to the point where they can't tolerate the loss anymore (a Volvo maybe, but not a Mercedes), and explains his priority is to make sure they never get to that pain level.