The adage "Think globally, act locally" that's so familiar to many causes and professions is poised to resonate in the planning profession, one proselytizing industry veteran says. Dan Moisand, CFP, a principal with Moisand Fitzgerald Tamayo in Melbourne, Fla., has been globe-trotting as a representative of the profession after sitting on the FPA board of directors from 2003 to 2007 and serving as its chairman in 2007.
Now in demand as a speaker around the world after helping lead delegations of American planners to meet counterparts in Russia in 2008 and China in 2011, Moisand has delivered presentations on five continents, talking about planning as a profession, and retirement planning and products.
His current status contrasts with what he describes as a humble start to his career. "My first job after graduating with a B.S. in finance from Florida State University entailed selling life insurance in Greenville, N.C., where I had followed my high school sweetheart, Kelly," he says. "The job didn't last, but the relationship did."
During the courtship, he discovered a professional true love: financial planning. Returning to Florida a few years later, he worked in a team practice at American Express, then at an LPL Financial branch and finally as a sole proprietor. In 2003, he merged with Charlie Fitzgerald and Ron Tamayo to form Moisand Fitzgerald Tamayo. Soon after the merger, Moisand made Financial Planning's list of Movers and Shakers, and in 2011 was given notable mention in the Lifetime Achievement category of FP's Influencer Awards.
American financial planners might wonder how knowledge of the work of advisors in other countries - where investment laws and regulation may be entirely different - can provide insight into their own practices. Moisand argues that familiarity with non-U.S. planners helps domestic advisors comprehend the globalization of the planning industry. For example, last year, there were more CFPs overseas (75,586) than in the U.S. (64,232).
Moisand believes that planning industry developments on other continents will likely travel to the U.S. Recently, five advisors from around the world made presentions at the FPA Experience 2012 conference in San Antonio on a topic perhaps unfamiliar to most U.S. practitioners - a ban next year on commissions.
According to Laura Brook, the FPA's director of community development, several countries, including Australia, Britain, India and the Netherlands, have taken steps to ban commissions on the sale of financial products, forcing investment advisors to switch to fee-based remuneration.
"The problem with regulation in this country," Moisand says, "is not the quantity of regulation but the quality of that regulation." On the one hand, he argues, the U.S. has too many ineffective regulations.
For example, he notes that dually registered advisors (those registered with a brokerage firm and with an RIA) can wear a financial planning hat one minute and switch to a salesman hat the next. On the other hand, the U.S. has financial transparency that is superior to that of other countries.
Moisand is convinced that an international perspective can help domestic advisors cope better with their regulatory burdens and lobby more effectively for sensible regulation in this country.
At home, Moisand works with five other advisors (all CFPs) and five support personnel out of two offices, one in Melbourne and one in Orlando. Principals of the firm generally work with $1million-plus clients, although Moisand admits to a soft spot for pastors, teachers and military retirees.
A GRATIFYING SPECIALTY
Over the years, Moisand has gravitated to retirement planning. This summer, he attended funerals for two clients - a reminder, he says, that personal finance is more often personal than it is finance. He also realized that neither of these clients came close to needing an inflation-adjusted income stream lasting 30 years. This insight increased his skepticism about the profession's 4% safe withdrawal rate, established by William Bengen in 1994.
According to Moisand, the 4% rule is based on worst-case scenarios. He says the 30-year assumption does not fit his personal experience with clients. "None of us know how long we are going to be around," he says.
Conventional wisdom varies. CFP Jonathan Guyton gained the attention of The Wall Street Journal 10 years after Bengen's seminal article with an argument that a 6% withdrawal can be safe as long as a few basic rules are followed. Yet a widely quoted 2010 study by economist Wade Pfau on retirement withdrawal rates in 17 developed foreign market countries actually found that a 4% withdrawal rate might be too liberal.
All of this means that, for domestic planners, there is no set-it-and-forget-it rate of withdrawals in retirement, Moisand says. Advisors need to spend more time talking with their clients about spending habits and life expectancies. He finds retirees quite flexible in their spending habits, depending on how things are going in their own lives and in the economy.
In his own practice, Moisand describes holding "a meaningful collaborative discussion with clients," laying out a game plan for their retirement and a tentative spending plan. But he also makes sure that they are alert to the possibility that changes in the market and in their own behavior may require adjustments and he encourages them to face various specific contingencies - "If the assets drop x% in value, we will decrease withdrawals by y%, [or] if our assets grow to x, we will fund a scholarship at our alma mater." In the end, Moisand says, "Most clients choose something close to but less than 5% as a starting point."
LEARNING TO DELEGATE
Reviewing his career, Moisand believes his biggest challenge has been learning to delegate effectively. "I spent too many years as a solo practitioner," he explains. "Since I like all this financial stuff, I want to do it all." But he and other solo practitioners, at some point, eventually exhaust their personal capacity. Sole practitioners need to accept the fact that they like control and seek out people they truly trust when looking for a business team.
"Joining an ensemble practice takes a commitment analogous to marriage," he says. Solo practitioners should take time to know potential partners and work together on several cases before partnering. Another bit of advice: Look for partners who see employees as assets and beware of those who see employees as expenses.
In his current position, Moisand has been able to hand over the reins in technology, personnel, operations and management to his partners. He focuses on retirement planning and communications. "I like figuring out ways to make complex things understandable," he says, "so I now handle all the writing for the firm, including newsletters, quarterly reports and such."
His firm's motto is "a sanctuary from the noise." Moisand's experience should make him an expert at delivering on this motto, both globally and locally.
Jim Grote, a Financial Planning contributing writer, is a CFP in Louisville, Ky.
Principal, Moisand Fitzgerald Tamayo, Melbourne, Fla.
Experience: A year selling insurance; part of a team practice at American Express and at an LPL Financial branch; sole proprietor. In 2003, Moisand merged with Charlie Fitzgerald and Ron Tamayo to form their firm. He also spent five years on the FPA board of directors.
AUM: $250 million
How I see it: "The problem with regulation in this country is not the quantity of regulation, but the quality of that regulation."