It’s 3:10 PM on Friday as I write this post and, once again, the market is way down (400+ points at the moment). One practical ramification of the market volatility is the scenario where a spouse feels harmed by any delay in the entry of the QDRO needed to divide an interest in their retirement plan.
The last thing you want is a client saying that if you had moved faster they would not have lost significant money in the market because they would have taken the funds out of the market if they had been transferred earlier. Of course, most people would have left the money in the market (and taken the hit) but that won’t be the way they see it when they need someone to blame for the loss.
What to do?
First, move fast. Get it done. Don’t procrastinate.
Second, and more realistically, set reasonable expectations. Warn the client that drafting a proper QDRO takes time. Explain the numerous delays in the process. Warn them that changes in the market may impact their share of the plan.
When we communicate we build trust. Setting reasonable expectations, and then exceeding them, results in happy clients.
Given the current circumstances it is especially important to communicate early and often regarding retirement plan distributions.
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