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Providing excellence in client education and retirement planning

by | Jul 12, 2017 | Advisor Interviews

Providing excellence in client education and retirement planning

by | Jul 12, 2017 | Advisor Interviews |

Taylor Northrop • Jupiter, FL
Buttelman & Associates Financial Services • GWN Securities, Inc.
Read full biography below

Proactive Advisor Magazine: Taylor, please describe your practice. What types of clients do you work with, and what services do you provide?

Our firm is the exclusive financial advisory firm for the Gold Coast Federal Credit Union and one of the authorized advisors for the Palm Beach County School District. While we work with many types of individuals and families, the bulk of our practice is in serving the pension and 403(b) participants of those two organizations. We provide educational services for these participants regarding their specific pension and investment programs, consult with them regarding their overall retirement planning, and, in many cases, offer a broader analysis of their financial picture and investment-planning needs. Typically, these participants are teachers, firefighters, police, or other municipal or county employees.

The important point I emphasize with prospective clients is that we are independent financial consultants. We can provide an objective voice in educating clients about making the most of their Florida Retirement System (FRS) pension options and retirement accounts. Beyond that, we can help these and other clients define their financial goals and design a retirement income plan. This customized plan will be based on an individual’s or family’s financial goals and objectives, tolerance for risk, and time frame. Our firm has a deep understanding of the FRS pension and retirement options and offers a variety of services to help make school district and public-service employees aware of the choices they have and to reach sound decisions at each stage of their lives. Our independent approach, we believe, is a distinct advantage for our clients. We are not captive, and we work with many of the investment and insurance industry’s most prestigious providers of products and services.

How does your day-to-day process work with FRS participants?

I grew up in the area, attended local schools, and my mother is a retired school teacher from W.T. Dwyer High School in Palm Beach County School District. My father and extended family were in the restaurant business in the area. I know a tremendous amount of people throughout the county, both public-service employees and administrators. I am open to talking with anyone at just about any time regarding their pension and retirement needs, whether they become a client of ours or not.

Our office is located at the Gold Coast Federal Credit Union, and we consult with people at the credit union or in their homes. But I spend a lot of time in the workplace and am constantly out meeting with people. I will frequently bring some baked goods or cookies from my family’s former deli and bake shop. People kid me that I am known as the black-and-white-cookie guy, but it is a nice icebreaker and a fun thing to do.

I engage people all the time in conversations about Social Security, their pensions, their deferred retirement options, and the many different variables involved when approaching retirement. By having that conversation and educating people, invariably someone will ask me to take a deep look at their situation and help them develop a retirement-planning and distribution strategy. They might also ask if I could help them think through their total investment approach, their life insurance needs, college planning, or Medicare and long-term-care planning.

People will often recommend me to co-workers, friends, or family members as someone who can provide helpful information with no obligation. We also receive referrals at the credit union and by speaking at schools, fire stations, police stations, and other public settings. I think I relate well to people’s typical concerns and how they are feeling about their financial future. The idea of retirement planning can be perceived as a complicated and intimidating process for many people, and I am there to help people simplify the process and make the best decisions they can.

What is your investment philosophy when approaching retirement planning?

When I first came into the financial-services industry, our firm had a strong orientation toward classic asset allocation. Generally, we used a blend of annuities, mutual funds, and fixed-income products for clients. Risk mitigation was always something I searched for in an investment portfolio strategy. It wasn’t something that I found right away. Some investment managers said they could manage risk well, but when it really counted, their strategies would not necessarily always deliver.

Since 2008—a period I will never forget—my goal has been to try to achieve positive returns for clients while still having risk mitigation as a primary focus. If a portfolio does not see the worst of drawdowns in a severe bear market, then it does not have as much ground to make up later. That means we can be a little more conservative overall while still achieving competitive returns. I have found a few third-party managers who are able to deliver on the parameters of achieving favorable returns in bull markets while better managing the potential for drawdowns in bear markets.

I am excited to offer a holistic portfolio approach to clients that may help better manage risk. I want my clients to be in the market, since history tells us that is the way to grow wealth over the long term. I see tremendous value in the services of the managers I use. They offer portfolio strategies that many of my clients would not otherwise be exposed to.

Many people do not understand that the way they invested their entire working lives may not be appropriate as they face retirement distribution.

Right now, I am leaning more toward a blend of passive and active investing strategies. We are pretty far into the bull market run, but the markets have been very resilient. We do not know when the market will turn, but I think it is sensible to have a blended approach. This approach can capitalize on further market gains while employing tactical defensive measures if needed in the future. The key is to develop a portfolio approach that makes sense for a client’s specific objectives, timing, and risk tolerance. The blend of active and passive strategies can be modified for every client, as appropriate, to dial up or dial down the risk/return parameters.

What is the biggest issue you encounter when evaluating the investment and planning needs of new clients?

There are many issues, but they can be broken down into two major areas. The first is the inability of many individuals to see how their potential retirement assets can work in unison to deliver optimal retirement distribution outcomes. Let’s imagine you have a couple who both worked as public employees in Florida. One might even have had a second career, maybe in the military. They have many issues to consider regarding their FRS pensions, 403(b)s, IRAs, Social Security claiming, Medicare, any nonqualified assets and savings, and any pre-existing retirement benefits or 401(k)s from other jobs. Dealing with this sort of complexity is where I believe our firm’s knowledge and skills can make a major difference in clients’ financial lives.

The second issue is related to the sequence of returns and the management of risk. Many people do not understand that the way they invested their entire working lives may not be appropriate as they face retirement distribution. I have an exhibit I show people that demonstrates the practical implications of the sequence of returns. In one example, a retiree’s portfolio had a significant loss early in retirement. In the second example, the same loss came much later into retirement. Although the average annual returns in each case are the same over a period of 20 years, the portfolio outcomes are very different. The sequence-of-returns issue can be devastating. This is one reason why I believe that tactical and active money management can play such an important role for our clients.

The bottom line is that I think our firm provides the experience and knowledge that can significantly impact the way people view their retirement-planning options. No one can control when they reach retirement age or how financial markets will act in the future. But they can control their decision-making in formulating a sound retirement plan and in managing risk. We would like our firm to be a part of that process, and we do everything we can to earn our clients’ trust and to provide excellence in our guidance and support.

Taylor Northrop is a financial advisor with Buttelman & Associates Financial Services, located in Jupiter, Florida. Since 2006, Mr. Northrop has provided financial education and personal retirement planning to Palm Beach County School District employees and members of Gold Coast Federal Credit Union. While he primarily works with educators and first responders, his practice also serves a wide variety of individuals, families, and small-business owners. He says his primary focus is “helping guide pension-plan participants and professionals with building a solid retirement income plan.”

Growing up with a love of soccer, Mr. Northrop was persuaded to try football and became a highly recruited placekicker. He says his interest in the financial markets took shape in high school as a student in the Academy of Finance program established by the National Academy Foundation. Mr. Northrop studied anthropology and related fields at Princeton University, where he was an All-American placekicker for the football team.

Mr. Northrop volunteers with Princeton University’s alumni affairs and assists in the university’s admissions process in his local area. He also serves as a volunteer kicking coach for Princeton and local high schools. He and his wife have two young children and they “enjoy spending quality time together.”

Disclosure: Taylor Northrop is an investment advisor representative of GWN Securities, Inc. Securities and advisory services offered through GWN Securities, Inc. Buttelman & Associates Financial Services and Gold Coast Federal Credit Union are separate entities from GWN Securities, Inc., which is a registered investment advisor, member FINRA/SIPC. Not FDIC/NCUA Insured – No Bank/Credit Union Guarantee – May Lose Value.

Photography by Jennifer Jones