Financial Planners See More Baby Boomers Nurturing Nest Egg

Financial advisor Andy Varble says the baby boom generation is just beginning to realize that the keys to attaining financial security are not necessarily what they used to be.

And that’s good news in the financial planning business.

“In the past, a lot of people would put their money in a mattress, or in a [certificate of deposit]--but a CD will barely beat inflation now,” said Varble, a financial advisor for Prudential Securities Inc. of Westlake Village. “Baby boomers are now realizing that they need to invest in mutual funds and go into bonds and stocks that may beat inflation with a relatively low risk, so they can have a nest egg for themselves.”

This sudden, gripping revelation among baby boomers has led to an increasing demand for the skills provided by Varble and others in Ventura County’s financial services community.

Whether it’s the aging of the baby boom generation, fear of a future without Social Security benefits, a general increased awareness of the need to save money or a combination of the above, many financial planners are busy these days.

Financial service providers--planners, consultants, underwriters and others in the industry--help people reach their financial goals for retirement, college education funds and other milestones by providing investment assistance.

Investment strategy may lean toward stocks, mutual funds or other means of saving and creating wealth, depending on the clients’ goals, ability to withstand investment risk, age and other personal factors.

“Baby boomers should have already been saving, but they are just now being shocked to their senses,” Varble said.

David Page, a Ventura-based life insurance and financial service agent for the Northwestern Mutual Life Insurance Co., said more and more people are becoming aware that federal Social Security benefits may not be around when needed or may not be enough to support them in retirement.

And many of them are coming to the conclusion that investing is a means of counteracting this potential problem, he said.

“Everyone has come to the realization that when all of us [baby boomers] turn 60, 65 years old, the money has to come from somewhere and it’s not going to come from the government,” he said. “Such a large segment of the population is going to be in need of Social Security that the system couldn’t survive as it is now.”

Page, who has worked in Ventura County for 14 years, said more clients are coming to him with specific financial goals.

“It used to be that someone would say, ‘I want a mutual fund and I can afford X number of dollars a month,’ ” he said. “Now someone will say, ‘How much do I need to set aside per month to reach this income at this age?’ ”

Some financial planners charge a percentage of the funds invested, others charge a set percentage of a client’s assets. Though their services are increasingly requested, many people also are opting to save on such fees by planning their financial future on their own.

With advanced spreadsheets available to the average home computer user, planning for one’s financial future has simplified dramatically in recent years.

“More people are trying to do it themselves and some of them are pretty good,” said Erwin Marine, a Westlake Village-based certified financial planner who has been working in the area for 15 years. “Most of them are better off than going to their local broker.”

However, Page said, clients tend to leave the more difficult planning to the professionals.

“The more sophisticated kinds of planning they don’t do on their own,” he said. “I deal with issues beyond just planning, such as determining whether there might be estate tax problems. Most financial plans done at home don’t deal with those kinds of issues.”

As might be expected, increased demand for financial planning services has led to increased competition among providers, Marine said.

“The good ones don’t have a problem, but there’s a lot of fallout for the others,” he said. “If a person’s been in business 10, 12, 14 years, they have either learned the lesson or they would have dropped out.”