When it comes to retirement planning, it can be a jungle out there. No one knows that better than Rick Parkes CRFA(r), co-founder of Diversified Estate Services. With more than thirty-five years experience, he’s seen a lot over his career.
To help people navigate through the retirement jungle, Rick has a weekly radio show on WZTK 101.1 FM, which is the largest radio station in North Carolina. The show, aptly named “Financial Safari”, has been on the air for five years. Rick works hard to make the show informative, fun and action-oriented, a strategy he thinks is paying off. “We talk about income planning, estate planning, asset allocation planning and more in a way that people can understand. We get lots of response, ten or twenty calls, and new listeners tune in each week.”
Rick doesn’t just dispense advice on the airwaves and then leave listeners to fend for themselves— he offers free follow-up consultations at his firm, Diversified Estate Services (DES). Many times, callers may already be working with a financial planner, but Rick always encourages them to call DES and get a second opinion.
DES is a ten year old independent financial planning firm in Raleigh, North Carolina that is currently serving 650 clients to some capacity. According to Rick, the “independent” part of the firm’s description is very important. “DES is not owned by a brokerage firm and there are no hidden fees. At many of these large financial planning businesses owned by brokerage firms, they will simply try to sell you their products.” Due to this, an independent firm is not prone to conflict of interest and there are a wide variety of solutions available to clients. In fact, Rick says, “the large brokerage firms don’t have fiduciary duty, meaning that a broker is not legally obligated to put his clients’ interests first. An independent firm does have fiduciary duty. At DES, we are legally obligated to put our clients’ needs ahead of our own. Of course, we would do that anyway.”
In addition, DES also offers a multitude of educational workshops. With financial and estate planning laws changing constantly, it’s important to DES to provide the latest information to people. Rick describes some of the class content, “We’ve offered workshops on tax planning so that Uncle Sam doesn’t become your biggest beneficiary. We’ve offered inflation planning, which is becoming increasingly important as healthcare costs continue to rise. We’ve also offered workshops on risk allocation planning and creating a comprehensive financial plan.”
It’s Diversified Estate Services’ emphasis on providing high-quality service to the client that’s led to their TEAM approach. TEAM is a popular acronym meaning Together Everyone Achieves More. The associates at DES have taken that to a whole new level for their clients. The firm has created a unique partnership with a top estate planning attorney and a top CPA in the area. This allows DES clients to have their financial, tax and estate planning needs taken care of all at once by one source. Not only is this more convenient for clients because they only have to give the information once, it often results in big savings. “Based on the average fees that other estate planning attorneys and CPAs are charging, our clients often save about fifty percent.”, Rick says.
Rick himself is a Certified Retirement Financial Advisor specializing in working with people who are either within ten years of retirement or already retired. As Rick says, “my clients are people who appreciate the value of putting money aside, but they don’t know how to do it. That’s where I come in. We’re in the business of SWAN planning, which stands for Sleep Well At Night.”
Pre-retirees and retirees have very different financial planning needs than other groups. Rick says, “When you’re younger, it’s all about growth. If things take a turn for the worse, there’s time to recover. For retirees, it’s all about preservation and distribution rather than growth. If they’re invested in something that’s too high risk, a downturn in the market can be devastating. It upsets me to think about someone in their senior years who isn’t in any type of preservation mode. They’re at risk and could lose everything they built up.”
A typical DES client is someone who’s starting to think about retirement, but doesn’t have a plan. “They have accounts, but don’t know what to do with them”, says Rick. “At DES, we don’t believe in buy and hold. Active management is necessary for our clients. The first thing I do is make sure we have your guaranteed income covered. Then we can take a look at other areas: their long-term goals, insurance needs, mortgage and long-term care. Finally, we take the discretionary funds and put it in investments that will work for them.”
As the average life span increases, a growing concern for retirees is to make sure they don’t outlive their income. Rick makes that his first priority for his clients, but he also makes sure they can enjoy their golden years. “One of my clients is a 72 year old man who worked for a large company for years. The company went bankrupt and he lost half of his pension. When he came to me, ninety percent of his investments were in risk. I changed it so that thirty percent of his investments were in risk and seventy percent were safe. He’s told me that if it weren’t for me, his lifestyle would have changed. He’s grateful that his lifestyle wasn’t affected at all. In fact, he recently took a trip to China with his daughter.”
Rick’s favorite part about his job is helping people. He loves advising clients and changing lives. Fortunately for him, he’ll be able to increase the number of people he helps with his first book, which is being released in January 2012. The book is entitled Help! I’m Retiring and answers some of the most frequently asked questions of people who are hoping to retire soon. Rick has hosted countless educational workshops at DES over the years and used them as the basis for the book. He says, “It’s fun, interesting and I’ve used a lot of personal stories that people can appreciate. I hope it will change lives.”
Changing his clients’ lives for the better is something that’s important to Rick, perhaps because of a man who changed his life for the better thirty-five years ago. At the time, Rick was a licensed insurance agent for Farm Bureau. Instead of simply selling the products to customers, Rick would offer financial advice. Rick recalls, “My manager, Ike Terry, noticed I had an inclination to help people with financial plans. He suggested to me that I shouldn’t work for a company, I should go work for clients. I took his advice right away. I kept in touch with Ike over the years. He was a good friend and I kept my insurance with him.”
When Rick is not working for his clients, he enjoys tennis, bicycling and walking. “I like to get out on the road and go,” he says with a laugh. For him, this is also a way to soak in his two favorite times of the year, the spring and fall. The streets of Raleigh are very familiar to him, as that’s where he’s been living since he was six years old.
As a child, Rick had “lots of energy” and was “inquisitive.” His mother taught him the ethic of being honest, something Rick says he’s carried into life— both personal and professional. “Whether good or bad, you have to tell it like it is. That’s something I put into practice with my clients. There’s no perfect place to invest. You need to look at something from all sides. That’s something else I learned from my mother.”
Another life lesson that Rick will always carry with him is that “we don’t know what’s ahead.” This is something he knows all too well after losing a daughter to leukemia twenty-five years ago. At the time, she was seven years old. “My love for her will never fade. It taught me an important lesson and makes me appreciate life.” Two of the things he appreciates most in life are his children, smiling whenever he thinks about them.
Rick says of his job, “I can’t think of anything else I’d rather do. I love what I do so much. I want to be known as someone who helps as many people reach their goals in life as possible.”
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