When the 60-something woman walked into the office I could see her fighting back the tears.
From time to time this happened to me as a financial advisor. After all, once you’ve counseled 500+ families about retirement, you’re bound to see some tough situations.
But on that day in April of 2009, it turned into a situation I’d never forget. The kind of situation that would make me sick to my stomach.
As I came out to introduce myself to her (let’s call her Mary), she thanked me for my time. I’d never met Mary before. She’d been referred to us by her husband’s co-worker.
We made our way to the conference room and as I always started off meetings, I asked her, “What can we do to help you today?”
Mary replied, “I’m in trouble. And I don’t know what to do.”
“Okay, what’s the situation?”
“Up until last Friday, I worked at a small regional bank for 32 years. On Friday, the Federal Government came in and seized the bank. They locked the doors. We are officially out of business. Which means I lost my job.”
“I’m really sorry to hear about that. That’s definitely not an easy thing to digest…”
“Yeah, well my job is my last concern. The problem is that I had my entire retirement account invested in the private stock of the bank. The valuation last year said it was worth $750,000. Is there anything I can do?”
I already knew the answer and I suppose deep down she did too…the simple answer was there’s nothing she could do. And the stock was virtually worthless.
$750,000. Poof. Gone. A lifetime of saving eviscerated.
And there you have it.
To this day, I find myself asking the question, if blooom had been around in 2009 for Mary and had she taken the time to even get a free analysis she would have seen where we cautioned her to not have more than 20% in company stock in her retirement account. Might that have been enough to get her to rethink what she was doing? I’d like to think so. And I’d like to think she’d have gone ahead and signed up (paid blooom a token amount) and we would have counseled her toward a more appropriate allocation.
Had she gotten help with her account from a professional earlier, I would have more than likely been interacting with a smiling and jovial Mary that morning in my office. She could’ve traveled, seen her grandkids on demand, and had the freedom to do just about anything she wanted.
Let’s not fool ourselves. There are “Marys” everywhere. Just ask the folks at Enron, Pan Am Airlines, or WorldCom. Entire companies go broke every year. It happens. The school of hard knocks rarely affords you a free lesson. Just ask Mary.
Blooom didn’t exist at the time for Mary. But it does for you. Don’t be a Mary, get your account checked.
The information is provided for discussion purposes only and should not be considered as investment advice. Diversification doesn’t guarantee a profit and can still result in losses in declining markets.
Published on January 20, 2017