New Beginnings
Beginning in this issue, the Journal of Financial Planning
is proud to announce two new columnists: Jonathan Guyton, CFP®, and
Amy L. Florian, MPA, FT. Guyton,
principal of Cornerstone Wealth Advisors Inc. in Edina, Minnesota,
will be one of the authors of our Retirement column. He is uniquely
qualified, having been a major contributor to the body of
literature on retirement distribution. His seminal 2004 paper,
"Decision Rules and Portfolio Management for Retirees: Is the
'Safe' Initial Withdrawal Rate Too Safe?" published in the
Journal, determined that safe initial withdrawal rates
could be higher than previously supposed, depending on the
retirement investor's allocation to equities.
In 2006, Guyton built upon this work in the Journal with,
"Decision Rules and Maximum Initial Withdrawal Rates," written with
William J. Klinger. This paper used Monte Carlo simulations to test
Guyton's original theory, concluding that two new decision rules
needed to be followed: the capital preservation rule and the
prosperity rule, described as "financial guardrails."
Guyton's inaugural column, coincidentally, makes an intriguing
companion piece to one of the technical contributions also
published in this issue, "Allocation to Deferred Variable Annuities
with GMWB for Life." Guyton agrees with authors James Xiong, Thomas
Idzorek, and Peng Chen that the decision to add a guaranteed
minimum withdrawal benefit to a variable annuity contract must
weigh its benefits and costs based on individual client factors,
such as longevity estimates, risk tolerance, and liquidity needs.
However, Guyton disagrees on the amount that inflation influences
the value of the GMWB. His research finds it diminishes the
product's value; Xiong, et al., find that annual income
from the product keeps pace with inflation, long term.
Guyton also salutes the influence on financial planning by ideas
originating outside the traditional financial realm, saying, "I
would not be surprised if, in 2030, we were looking back and noting
our professional leaps that had been inspired by quantum physics,
grief counseling, sociology, or poetry." What a perfect way to
segue into the introduction of another new columnist, grief
counselor Amy Florian.
Amy Florian will be one of the writers of our Money and Soul
column, having served as a guest columnist in our November 2009
issue. She's the founder and CEO of Corgenius, a company that
specializes in training financial professionals how to interact
with grieving and emotional clients (http://www.corgenius.com/). She has written
numerous articles, two books, and is an adjunct professor
at Loyola University, Dominican, and St. Xavier University.
She is a fellow in Thanatology in the Association for Death
Education and Counseling.
Florian's column in this issue, "Planning for College: Beyond
Investment Strategies," looks at the important role financial
planners can play in helping clients and their college-bound
children deal with issues that transcend financial
considerations.
An engaging and dynamic speaker, Florian conducts regional and
national workshops, consulting, and training sessions. Watch for
her at FPA Retreat 2010 in San Antonio, Texas, where she will
present the session, "Help! What Do I Say?: Handling Those Awkward
Times with Grieving Clients."
Lance Ritchlin
Editor
