Boomers' wanderlust could provide a bonanza in fees for advisors.

    Beverly and Wayne Carpenter of Houston, ages 65 and 68, respectively, have little in common with the roving Dean Moriarty and Neal Cassady characters of Jack Kerouac's On the Road fame. But like Kerouac's heroes, the couple, both retired, are acting out a fantasy many of us have as they roam the country in an RV on their own voyage of discovery-blessedly, in the broiling summer heat, with the added touch of air conditioning.
    It is the third year on the road for the Carpenters, who chucked their old life in 2002 for a "5th Wheel" trailer-pickup combo that keeps them moving from place to place. They've been traveling in the dry, open western part of the U.S. They spent the summer in South Dakota and this fall in the Davis Mountains of West Texas.
    South Dakota, Texas, Florida, Washington and Montana have a common allure: no state income tax for permanent residents. Across the country, scores of graying preretirees and retirees-in fact, Americans of all ages-are doing the same. Sensing newfound opportunity, some financial advisors and wealth managers are tapping into this $14 billion market, assisting with planning details and helping manage clients' assets while they're away.
The Financial Planning Association estimates a whopping 30 million Americans are RVing these days, a potential gold mine in fees for advisors. There's even a new Idiot's guide and a Dummies book on RVing on the market. Florida alone, by some estimates, has upwards of 300,000 registered recreational vehicles.
    "All the factors indicate the RV market is going to grow over the next decade," says Jim Lubinskas, a spokesman for the Recreation Vehicle Industry Association (RVIA), a trade group. "Given that many RVers are baby boomers, they have more money and time to pursue this lifestyle. RVers are more affluent than the population at large. It's a good target market for financial planners."
    This nomadic community has special financial planning needs that advisors can fill. Where do you get your mail? How do you budget expenses-particularly with the high cost of gasoline? What type of RV should be purchased? Do you keep, sell or rent your home? What are the tax benefits of owning an RV as opposed to a home if your home is your primary residence? What will be your home state, and how will that impact your choice? How much insurance do you need?
    We asked several certified financial planners with RV clients to share their triumphs and headaches with this community: Mary Lacey Gibson, of San Juan Bautista, Calif.; Joseph R. Birkofer, Houston, whose clients include the Carpenters; Douglas G. Neal, also of Houston; and Jim Ludwick, of Odenton, Md..  

Goals And Planning
    Their goals, as you'd expect, vary. Some seek a new place to settle down, others a new lifestyle. Still others want the ability to travel where and when they want, to visit loved ones, to avoid the hassles of commercial travel. Some work part time on the road to supplement their income, or volunteer their services where needed.
    In common with many RVers, Gibson's client, a 60-year-old retired U.S. government employee, wants to see the country, and has no notion how long she will be on the road. "It could be ten months to ten years," Gibson says. Birkofer's clients, the Carpenters, have a bit of altruism in mind. Birkofer says, "They spend a lot of time as park volunteers, for which they get free or reduced rates in exchange for checking on trails, reporting maintenance issues, selling firewood, etc."
    Neal's clients, a Houston couple, both 69, have the same idea in mind. "They began four years ago," says Neal. "They're traveling in a motor home, helping small congregations build or remodel new churches. They set up for about three to four months in one location, and when that project is over, move on to the next state or city."
    Good planning is essential, and advisors should help RV clients lay the groundwork. Birkofer says people who choose this lifestyle are innately good at planning, easing somewhat the advisor's task. The Carpenters, he says, didn't have a big financial planning problem. "We helped them solve the biggest planning issue for retirees, which is drawing up and living within a budget. We handle their retirement savings, which is a regular account and an IRA, and they draw their Social Security checks."
    Gibson says her client mapped everything out fully two years in advance in order to understand the RV lifestyle. "She rented trailers and RVs during this time. She attended conferences, contacted a financial planner and, most importantly, did a great deal of soul searching to determine what she most valued in life. She has clear goals about what she wants to experience and where she wants to eventually live. She planned, and planned well."
Ludwick's clients included a couple of federal government workers in their late fifties getting ready to retire. They had considerable experience on the road and were in organizations that had prepared them for their choice. Another couple, in their early sixties, Ludwick says, sold both their home and business for $1.5 million and bought an RV for $190,000. "The business couple was just getting started, and I networked them with my other couple," says Neal, adding that the RV dealership had a practice park, where they took "lessons" for a week's time.
    Working with both couples reminded him of John Steinbeck's travels with his French poodle Charley. " I could see the wanderlust in their eyes," relates Ludwick.

Financial Planning
    Advisors should be aware of special financial planning issues involved with these modern day nomads.
    For Neal, it was a matter of allocating his clients' assets to produce as much income as possible and keep it safe at the same time. He recommended a cash management brokerage account with check writing and debit card privileges so his clients could readily access their earnings, pay bills on time, and be able to see their cash balances on a regular basis. This eliminated their fear of being overdrawn.
    The couple kept their house in Houston for a year and had their grown son stop by regularly and check on it, but sold it when it became too much trouble for the son to look after. They added the proceeds to their investment accounts, and it enabled them to cut expenses by not having to pay taxes and property upkeep. Bills were sent to their son, who in turn forwarded them in a package to their parents at their current location.
    Neal helped his clients secure a Medicare supplement and a long-term-care policy from a national carrier that could be used anywhere. They settled on a joint LTC policy to keep costs down.
    Gibson's approach with her client was hands-on. "She owned her home and came to see me initially because she wanted to know if she should rent or sell her home. Her home was in a fast-growing area of California." Though she could have held onto the home and possibly have its value appreciate, she decided to move on and cut her ties. She sold the home and put aside $300,000 in laddered CDs for a possible home purchase in the future, and invested the balance in a diversified portfolio. "Between her pension and qualified and nonqualified accounts, she had ample funds to allow her to live on the road for as long as she wants," says Gibson. After some years she will have to replace the RV, but the cost of this has also been factored into her planning.
    Other challenges can be vexatious, but need not be. Wireless technology and the Internet have made communications seamless in most parts of the country, and several mail-forwarding businesses, including Mail Etc., cater to the RV/trailer set. It turns out that mail is not a big problem with the RVers.
    High fuel and insurance costs were factors in budgets. The Carpenters, for example, are avoiding big urban areas due to high gasoline costs and staying closer to home in Texas, according to Birkofer.
    Your RV clients are best advised to purchase health insurance from a national carrier "so it can travel with you," says Gibson, whose client settled on Blue Cross-Blue Shield. In the case of Ludwick's clients, the government couple was well covered since they were also military retirees with excellent cross-coverage by the time they retired, the advisor reports. His business couple, on the other hand, was relying on an individual policy costing close to $900 a month. "The husband was within three years of Medicare eligibility, but the wife was five years away. This was a major budget concern for them."
    With these clients, there are issues you may or may not encounter with regular clients. Gibson enjoys the special challenges, and works with her RV clients on a project basis. Neal found his level of servicing requires a client he can work with and meet on a regular basis, whereas Birkofer is comfortable with them traveling all the time "because we're communicating frequently by phone and e-mail and no one else is chasing them."
Says Birkofer: "Most clients hire you because they want to have a trusted advisor and because they don't have the time, talent or temperament to manage their portfolios. But retirees who have adopted the RV lifestyle don't want their investments to have the same nomadic style they are enjoying. That can make for a great financial advisor relationship."

Bruce W. Fraser, a New York-based freelance financial writer, was a commissioning editor of Sixty Things To Do When You Turn Sixty (Ronnie Sellers Productions) He can be reached at [email protected]. Visit him at