He handed me the latest statement of his retirement portfolio. I had a pretty good idea of what I was about to read. It was October 2002. The stock market was at a low after the dot.com bubble. Most portfolios I was seeing from potential clients were down 20% to 80%, especially those with heavy allocations in technology and startup dot.com stocks.
To make matters worse, many of those with large losses had panicked and jumped out of the market, basically locking in their losses for a lifetime. I feared that was the case here, but I was wrong. Ron had actually done well. He had a broad diversification of small to large companies, with a nice smattering of international stocks.
I told him, “Ron, you have done a great job of managing this portfolio. We can certainly lower the volatility by broadening the assets, but I couldn’t have done better on the equity portion.”
Ron looked at me in disbelief. “Really?” And then he began to cry. No one had ever affirmed his investing skills before.
Ron and his wife Ruth did become clients. Ron was relieved to turn over responsibility for their investments. Over the years, I helped them with their estate planning, helped them shop for insurance, and made sure that they had enough cash flow to live comfortably. I remember the meeting where we discussed their ability to continue to live independently, which ended in their decision to move to an assisted living center.
When I met with Ron and Ruth in the summer of 2008, the economy had once again started turning downward. At that time, stocks were down about 15%. Because of its broad asset class diversification, Ron and Ruth’s portfolio was up about 1%.
Ron, now in his 80’s, mentioned that a recurring kidney infection was zapping his strength. When Ruth left the room briefly, he told me, “I don’t think I’m going to make it through this sickness. I want you to take good care of my wife.”
I was a bit taken aback by this. Still, I assured him that if he were to die I would certainly take good care of Ruth.
A month later, Ruth called to tell me Ron had passed away. He had recovered from the kidney infection, but had died from a sudden heart attack. I was shocked, and I immediately recalled his prediction in our last conversation.
Ruth and I continued working together. Every time we met, it seemed that Ron was present. As her portfolio recovered from the crash of 2008-2009, I would often say, “Ron would be pleased.” I felt a special sense of mission and a deep satisfaction that I was upholding my promise to him.
A few months ago, at age 92, Ruth was diagnosed with Alzheimer’s. Her children moved her to an appropriate facility, and I never saw her again.
Recently, Ruth died. Her children asked me to liquidate her account and distribute the proceeds in accordance with her will. I did so with some sadness. My role in Ron and Ruth’s life was over.
I recently told this story to a friend, who said, “You’ve just described real financial planning.”
Indeed. Financial planning is about far more than asset allocation, investment returns, and estate planning. It’s about being the torch holder for clients’ hopes, dreams, and well-being. It’s about a relationship that can even extend beyond a client’s lifetime.