In 1991, Rita Gaffney, a young woman with a degree in finance, landed a job at the Merrill Lynch Fifth Avenue office in NYC, ready to take on Manhattan. She started out as a junior trader, supporting head advisors. “I was doing the grunt work of the financial world,” she laughs.
It was an exciting, fast-paced life, but with a long commute and a young son, Gaffney decided that she needed to look for work as a financial advisor closer to her Cold Spring home. “It took the manager of the Merrill Lynch Poughkeepsie office about a year to hire me,” she recalls. “But I was very persistent. I remember his words when he finally gave me the offer: ‘I don’t think you’re going to make it. You’re not money-hungry enough, but I’ll give you a shot anyway.’”
Determined to prove him wrong, Gaffney plunged wholeheartedly into wealth management in 1994. With colleague Jim Walker, she formed The Walker/Gaffney Group at Merrill Lynch in 2000 — one month before the peak of the markets in the technology bubble. “We were able to rebalance portfolios ahead of that and reset allocations, so clients didn’t get hurt that badly,” says Gaffney. In 2008, after the Bank of America purchased Merrill Lynch, the pair decided to partner with Morgan Stanley, also in Poughkeepsie, where she lives today.
With complementary skills — her specialty is financial analysis and cash flow; his is liability, business development, and working with estate-planning attorneys — the team today counts some 190 households, half of them in the Hudson Valley, as clients.
That’s a lot of moolah to manage, but Gaffney is unfazed.“I plan ahead,” she says simply. “A favorite quote of mine is: ‘Hope is not a strategy.’ We try to put the most emphasis on the retirement goal,” which Gaffney says seems to be the “most important area” and the area for which the fewest families are prepared.
“I need to have those tough conversations with clients,” says Gaffney. “I equate it to when you go to the doctor. If you have aches and pains, you need to tell them everything so that they can do a thorough analysis. And you get poked and prodded, and it’s not comfortable, but if you really want to know what the diagnosis is and how to stay healthy, you need to go through that process.”
For Gaffney, the financial version of the process involves asking lots of questions about life goals. “Define what that looks like to you. Allow me to feel it. Do we know how you are going to achieve [those goals]?”
“When we started doing planning in the ’90s, and I would do a life expectancy of 85 — because, actuarially, that was the life expectancy at the time — I remember individuals saying, ‘I’m not going to live that long.’ And I’d say, ‘For kicks, let’s just plan for it.’ And now those people are 80 and 81. Now we’re factoring in 92 as life expectancy because that’s where we are right now.”
The biggest pitfall for most people, Gaffney believes, is that they don’t realize the impact of inflation and taxes down the line.
“But it’ll be okay,” she says. “I tell people: ‘Don’t be afraid to have the conversation. Let’s just get real and get it done.’ Then they won’t have to think about it for a while, because the plan is going to be on autopilot. We’re going to be checking on it every now and then, making sure it is growing.”
Gaffney definitely practices what she preaches. When she was 42, she bought a retirement home in Florida. “A little early,” she admits, “but it was a great investment and great time to buy.” And she already knows she is going to retire in 15 to 17 years.
That is, if her clients let her. She has been invited to their weddings, to sit at the honor table, watched their kids go off to college and held their hands as they made the transition to retirement and left their former lives behind.
“In so many instances, I’ll be invited by a client to an event, and someone will ask the person who I am. It’s hard to just say, ‘financial advisor’ instead of ‘friend.’”
