SRQ M AGAZ I N E RET I RI NG GR AC E FUL LY : : DE CE MBE R 2021
IN C ONVERSAT I ON
ABOUT SCOTT D. ZELNIKER Sco has been creating tailored solutions for his clients’ financial lives since 1992, when he began his career in the industry at Merrill Lynch, developing a practice centered on the needs of private business owners. In 2016, Sco and his partner, Peter Dorfman, joined UBS, where they transitioned to the Private Wealth platform to draw on the firm’s vast resources to find optimal solutions for their clients. Sco holds the Chartered Retirement Planning CounselorSM and Chartered Retirement Plans SpecialistSM designations awarded by the College for Financial Planning. He has been named a Forbes Best-In-State Wealth Advisor in New York for 2020 and 2021. He earned an undergraduate degree in finance from Boston University, and an M.B.A. in finance and business management from Hofstra University. Sco focuses on macro strategic planning, investment oversight, portfolio construction and wealth planning. He also helps provide solutions to his business- owner clients’ needs with an emphasis on exit strategies and liquidity events, as well as their contributions to overall financial and long-term estate planning strategies. With experience in wealth planning, asset management, risk management, business succession planning, philanthropy and family governance, Sco is an integral piece of any professional advisory network. As a Private Wealth Advisor, he coordinates direct access to the global resources of UBS, including the intellectual capital his clients need for complex liquidity events and long-term estate planning across generations. The Zelniker Dorfman Carr & Heritage Group. UBS Financial Services Inc. Private Wealth Management Sarasota City Center, Ste 900, 1819 Main St., Sarasota, sco .zelniker@ubs.com
that knows they’re getting a big inheritance later. We also have people on the team who specialize in the $2-$10 million space and then we have some younger advisors on the team that specialize in the $500,000 to $2 million space. Under that $500,000 level, there’s not a lot we can do because the situation isn’t that complex yet from an estate planning perspective or from a gifting perspective. So the larger the estate and the more complex, the more need for us. For people that come in below that threshold, we will guide them and send them to another institution where we think that they could be catered to better but we’ll keep that relationship. We want to be in the prospective client’s life because you don’t know when things change. WHAT IS YOUR ADVICE TO THE YOUNG PERSON JUST STARTING OUT? We tell them to start saving. Sometimes our clients have grandchildren that just started in the workforce and they’ll say, “My grandchild wants to talk to you.” I’ll happily get on a call with them. Typically they’ll say to me, “I have $20,000 in my bank account now and I’d like to start investing.” My question to them is, “Do you have a retirement plan at work?” And if they say yes, I say, “With all due respect, I’d rather see you invest in your retirement plan and not put the money with us at this point.” The advantage to them is that money is going to a tax deferred bucket. If they earn one dollar with us in a taxable account and that one dollar of earnings becomes 70 cents to them because the government is going to take their share. In a retirement plan, that one dollar will compound, and remember we talked about that power of compounding, so it becomes very meaningful for them.
FOR THOSE INDIVIDUALS WHO DO HAVE A RETIREMENT PORTFOLIO WITH YOU, WHAT IS THE CONVERSATION LIKE WHEN IT COMES TO RISK? There are three buckets of peoples’ money. There’s liquidity, there’s longevity, and there’s legacy. So using those three buckets, we’ll say to people, “In your liquidity bucket, you can’t put in a retirement plan because you’re not going to be able to access that money penalty free until 59 and a half. So we want you to have enough money outside of a retirement plan where you could still grow it for retirement, but we want to keep it available to you for your liquidity needs. When we talk about your longevity, money you’re going to need after retirement, that longevity bucket is what we want to grow for that time frame when there’s not a paycheck anymore. Then people reach a third stage where we start talking about legacy. Is the goal to leave all your money to your kids if you have kids? Is your goal to leave some money to the kids, some to charity? Do you have philanthropic intent now versus when you’re no longer here? We try to get people thinking of those three buckets because each one has a distinct strategy as to what we’re going to be doing with it. YOU BRING UP PHILANTHROPY AND DONATIONS. HOW DO PEOPLES’ DONATIONS WORK FOR THEM FINANCIALLY? When clients give a donation, they can really do it in a couple of ways. They can donate cash, they can donate appreciated stock. We know the markets had quite a run here over the last decade or so, so if somebody donates a dollar, that’s good and they will get a tax deduction for that dollar. But if a client donates $10 but their cost basis on the stock is a dollar, they will get a tax deduction on the $10 and they won’t have to pay the
capital gains tax on the sale. Many times, we encourage clients to gift appreciated securities as opposed to gifting actual dollars. There’s a couple of tax advantages for them there. The other thing we ask is ‘do you want to give while you’re alive or do you want to give as part of your estate? Because if you give money as part of your estate, the money that goes to a 501(c)(3) charity after your death will not be subject to the estate tax in your estate but if you give that money during your lifetime, that money won’t be in your estate either but you will get a tax deduction during your life.’ Let’s say there is someone who’s 90 years old on their deathbed. They have a greater benefit of actually writing the check or gifting the securities while they’re alive because they’ll get a tax deduction for it in addition to it being out of their estate. DO YOU HAVE CLIENTS THAT WORRY ABOUT CATASTROPHIC SITUATIONS? Yes, they worry about a myriad of things. Structurally, the way we run our business is we have a quarterly call with every client where we talk about everything. Many are worried about the infrastructure bill. They’re worried about the debt ceiling. They’re worried about interest rates. They’re worried about potential government default. They’re worried about tax rates. They’re worried about social security. I’ve been doing this for 30 years now. When the tech bubble burst it was a very uncertain time. 9/11 was an extremely uncertain time. The debt crisis, the banking crisis in 2008 was a time where there was a lot of fear. March 2020, a very scary time. We didn’t know if we were ever going to leave our homes again. When we start to talk through all of these issues with our clients, we lay out a worst case scenario. For instance, right now, if they
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