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Exclusive Interview with Roger Wohlner: On Annuities, Target Date Funds and the Fiduciary Standard

October 22
00:03 2013

When began publication in 2009, we thought it might be instruction to see what other popular financial sites were doing. As if on cue, The Wall Street Journal posted their list of top financial blogs. Atop that list sat roger_wolhner_300a writer/practitioner from Chicago. We contacted this fellow and discovered he really knew his stuff. We’ve been talking to him about industry topics ever since. Only recently did we discover we’ve never had the opportunity to share his wisdom with our readers. This week we correct that.

Roger Wohlner, CFP®, is a fee-only financial adviser at Asset Strategy Consultants based in Arlington Heights, Ill., where he provides financial planning and investment advice to individual clients, 401k plan sponsors and participants, foundations, and endowments. Check out Roger’s popular blog The Chicago Financial Planner where he writes about issues concerning financial planning, investments, and retirement plans.  Roger also contributes to the US News Smarter Investor Blog as well.

FN: You are a rare breed – a very successful writer as well as a successful practitioner. Can you tell our readers: first, what got you interested in the financial advice-giving business; and, second, what prompted you to begin writing?
Wohlner: I graduated college with an undergraduate degree in Finance and then went on for an MBA. My initial work experience was on the corporate finance side but investments and financial planning have always interested me. Additionally, I really enjoy helping real people and the retirement plans that these people use to builds their nest egg. The writing part was a natural extension of both my interest in writing and my entrée into social media.

FN: What’s been the one thing that is most responsible for you success in writing?
Wohlner: I think that readers enjoy the fact that I tell it like I see it and that I am able to use my experience as an advisor to try to explain some of the complex issues in the financial planning realm to them in understandable terms.

FN: For those practitioners out there who might be interested in moonlighting as a writer, what advice would you give them?
Wohlner: Tell stories, use your experience, and write for your readers. Figure out where writing fits and your objectives for writing.

FN: Turning to the practitioner side, you’ve long advocated the Fiduciary Standard. Do you have any favorite stories you can share with our audience that highlight how the Fiduciary Standard has helped investors?
Wohlner: I think that the Fiduciary Standard as practiced by my NAPFA fee-only colleagues and others has helped investors by ensuring that their advisors put their interests first. This means that investments and financial products are not selected just to enrich the advisor, but rather because they benefit the client.

FN: How do advisers operating under the Fiduciary Standard have an advantage over those that do not?
Wohlner: I often wonder if advisors who don’t operate under the Fiduciary Standard have trouble deciding whether they need to serve their Broker-Dealer or their client first when a conflict arises. The Fiduciary Standard makes it pretty clear whose interests come first, that is if the advisor needed such guidance.

FN: In terms of investments, what are some warning signs investors should be on the look-out for regarding the dangers of Target-Date Funds? On the flip-side, under what circumstances do you feel it would be appropriate to invest in a target-date fund and what are some of the positive signals investors should look for in Target-Date Finds.
Wohlner: As with any investment, a Target Date Fund is not a set-it and forget instrument, no matter what the fund companies might want investors to believe. For younger 401k participants, a Target Date Fund can be a great choice as the longer dated ones are typically more aggressive and this provides a one-stop diversified portfolio for those younger participants for whom in many cases this might be their only investment. Investors should understand the inherent risk of any TDF both from their investments in equities and with the prospect of rising interest rates from fixed income.

FN: One word – Annuities. Many have said it makes no sense people aren’t investing into them more than they are (and will be publishing a story on this in the next several weeks). What’s your take on this? Are annuities a solution looking for a problem or a good theoretical idea that just hasn’t yet manifested itself into an attractive product (from a pricing standpoint)?
Wohlner: My take is that annuities are a better theoretical solution than a practical one. Far too many of those sold commercially have very high expenses which really mitigates the benefits.

FN: You advise 401k plans as well as provide individual advice. Within the retirement area, there is a growing emphasis on savings rather than investing. Why is this a good thing and what have you done with you clients to make sure their employees are saving more?
Wohlner: Studies have shown that the largest factor in determining the success level of retirement savers is their level of savings. This far exceeds investment returns or any other factors. Aside from helping my plan sponsor clients provide the best possible investment menu for their employees, I have not done all that much in terms of working with the participants of any of these plans.

FN: What’s the greatest single challenge facing the financial services industry and, if you had a magic wand, what one thing would you do to address it?
Wohlner: Helping to demystify investing for the investing public. We could all start by explaining things to them in plain simple English.

FN: What is the greatest single challenge facing investors today and, perhaps with a different magic wand, what would you do to fix it?
Wohlner: The biggest challenge is information overload. Which information is good, which is noise? Sadly I don’t have an answer for that one.

FN: Roger, as always, it’s been a pleasure getting your take on the many interesting topics confronting fiduciaries and investors today. We really appreciate you allowing us to interrupt your busy schedule. Our readers will no doubt benefit from your insights and experience.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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