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When Spouses Provide the Solution

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David Geibel, a managing director at Girard Partners, a Univest Wealth Management Firm, was featured on Financial Advisor

January 13, 2017
By David Geibel, Girard Partners, a Univest Wealth Management Firm

He recalls a client who had a hard time leaving his customers and staff behind when he tried to retire.

Like a lot of financial advisors, I’m an analytical guy. If I could just sit down with my spreadsheets and figure out retirement dates and clients’ projected assets, and then email it all to them, I would be a happy advisor. Of course, financial advising is rarely that simple. That lesson came home to me with a client who wanted to retire but was having a hard time detaching from his dentistry practice.

I was working to come up with scenarios that made sense for him, but it was a struggle. It was prodding and questioning from my client’s wife that turned out to be key factors in resolving the situation. Here was a case where a couple of analytical types — the dentist and I — benefitted from hearing a different point of view.

My client had a successful practice, and he cared a great deal about his customers and employees. His fellow dentist and long-time business partner had died unexpectedly a few years prior and my client was working hard to manage things on his own. Financially, it did not make sense to sell the business outright, as it was expected to increase significantly in value in coming years.

His wife was frustrated by the situation. She worried he was working too hard and that this was impacting his health. She feared he would end up like his partner. What’s more, the wife was eager for them to spend more time in their second home in Florida.

My impulse in this case — as a straightforward numbers guy — was to provide two options to the couple; one that had them sell the business immediately and the other involved pushing the sale off a few years when the business would have more value.

The problem with the first option was that by selling right away they would sacrifice significant returns that would aid their retirement plans. And the problem with the second was that it meant more years of hard work for the dentist.

Neither was an optimal solution but our discussion might have been limited to just those two options if there hadn’t been another person in the room. The dentist’s wife made it clear that she was impatient with her husband’s unwillingness to give up on his clients, but neither was she willing to risk her retirement. Her input made it obvious that we needed to come up with a different solution.

That third option ended up looking as follows: The dentist would take on a younger practitioner and transition clients to this new partner. This would allow the dentist to work toward leaving his practice while also making sure his staff and long-time patients were in good hands. Eventually, I suggested, as more patients were transitioned, the dentist could spend less time at work and more time in Florida with his wife. Finally, at an appropriate date in the future the dentist would sell the business and enter into full-time retirement.

My client was doubtful about this third option, as he did not believe he could find another dentist that he could trust. However, with the helpful prodding of his wife this is the option they chose. And it proved to be the right one.

This experience left me with a couple of lessons that changed my approach to similar cases.

First, the best answer isn’t always the easiest or simplest. That may sound obvious but the hard part is coming up with something that will please everyone, including spouses and partners. And that’s my second — and most important — point: Listen to spouses and partners and include them in your planning scenarios. Sometimes the answer to a tricky question is revealed through the concerns of a spouse or partner.

View the original article at: http://financialadvisoriq.com/c/1541133/174593

Investments offered by Girard Partners, a Univest Wealth Management Firm, are not FDIC insured, are not a deposit of or bank guaranteed, and are subject to risks, including loss of principal amount invested.

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