1. Brian Kaufman noted that the resolution of fiscal-cliff issues over the winter had eased some investor concerns about taxes. | 2. Technology, said Scott Holsopple, will create opportunities for wealth managers and push new levels of service down to clients with smaller portfolios.

Large-cap stocks, said Tracy VanDyke, stand to make long-term gains if the uncertainty over the Affordable Care Act’s health-insurance reforms can be quelled. “As the uncertainly around the health-care bill clears up, I think that you’re going to see unemployment get a little better,” she said. “Large-cap stocks, over the last 12 to 24 months—actually since 2009—we’ve seen a lot of growth.”


The Small Business Challenge

Ingram’s Publisher Joe Sweeney said the magazine’s frequent dealings with other small businesses had shed light on an under-reported phenomenon: That of small-company owners quickly approaching retirement age at the worst of times. Many have struggled to maintain their business’ valuations over the past five years, but others have seen those valuations plummet. What, he asked, are the consequences for them?

Succession planning, said Matt Melton, was indeed becoming a greater issue as owners consider not only whom they should sell to, but when, and how the deal should be structured. “I’m starting to get a feeling from clients that that’s really the thing they’re thinking about all the time,” he said.

Lynn Mayabb said her office was trying to get entrepreneurs and business owners to start pondering those questions as much as five years before a potential sale. That time frame, she said, would meet their need to plan an exit strategy. “That may be upgrading equipment to make their company more attractive to sell, it may be deciding that they’re not going to do certain things because they know they’re going to sell at a discount, but would rather do that than put money into it.” Regardless of whether a sale is achieved through owner financing, installments or bank financing, she said, it was vital that those clients know that “they can’t wait until six months before they’re ready to leave and go, “Well, I’m now ready to sell my company.’ ”

Bob Rippy said his office had seen family takeovers or larger companies buying the smaller companies and absorbing them when there’s no younger generation to take over, or in some cases, the owners will sell to key employees. Mayabb noted that venture capitalists were sensing opportunities there, too, buying and restructuring businesses with the intent of selling within five years—if the growth potential is there.

But in some cases, she acknowledged, Darwinian principles prevail. “You do have some owners who just have to realize they’re just going to have to shut down,” she said. Some can’t find a buyer, or it’s not a profitable business.

The same issues have confronted those businesses for years, Melton said, but the urgency is greater today. “That’s a large opportunity we have to provide some value there in that succession planning and how to help them through that.”

As Ken Eaton noted, though, the same cautions about ownership of stocks or bonds apply to business ownership. “It all goes back to the old buzzword, diversification,” he said. “You’re saying that basically what happened was they just continued to invest all of their money back into the business, and obviously, that makes it a lot more risky.” Owners who take some of that money off the table a little at a time, he said, aren’t asking that question at this point. “You understand why they did it,” he said, but refraining from putting all the eggs into that basket wouldn’t make it a retirement-planning conundrum.


Social Security

How, participants were asked, are they advising clients, particularly the younger ones, on the best way to approach Social Security as a component of a retirement plan?

“Most of them don’t believe they’re going to get it,” said Bob Rippy.

“They all have their own ideas about whether or not they’re going to get Social Security,” said Ken Eaton. “I think that’s just a decision they have to make, and we can use that as one of our assumptions.”

Lynn Mayabb said that at BKD, “if we’re running a plan, we’ll run it without Social Security first to see if it will work without it being included, and try to run the most conservative estimates we can.”

Why, wondered Tommy Taylor would any investor today rely on Social Security? “If that was the only check you had, could you live on it?” he asked. “I don’t think you can. Social Security is an extra, a bonus, in my mind.”

Exactly, said Tracy VanDyke. “It’s the gravy that’s going to pay for some unexpected costs,” she said. “Just plan on it being the gravy that will help address some of those needs, but don’t count on it. Especially if you’re under 35.”

The bigger concern for those younger investors, Ken Eaton said, was health-care costs. It’s easy to see from a Social Security benefit calculator what the loss might be in a worst-case scenario. “But when it comes to health-care costs, everybody knows that there’s no limit, and that at some point, that camel’s back is going to break,” he said.