This article from Investment News paints an interesting picture of both clients and advisors in a difficult market environment. The economic times are “iffy” at best and clients are, not surprisingly, concerned about the strength of the markets. Notice how one advisor describes the problem of dealing with his retirees in uncertain times: “I have a fiduciary responsibility to help clients manage their retirement. If we pull to the sidelines and miss an opportunity, that's not a responsible posture. Clients want growth when the market's going up and preservation when it's going down, but they can't have it both ways.”
Yet it isn’t nearly so clear that clients can’t have it “both ways.” Guaranteed income to cover the basics in life and core positions with principal protection – in other words, a secure retirement – can and should be used to supplement market investments to make sure losses aren’t devastating to a client’s retirement. Moreover, when a client has the security of knowing that his or her retirement is protected, market risk on the balance of his or her portfolio isn’t nearly so worrisome. When the retirement is secure, it’s easier to ride out difficult markets and to be patient. A good advisor has an obligation to help clients retire *and* to make sure that their assets are preserved sufficiently so as to allow them to stay retired.
It is possible to have it both ways after all.