Advisors to Pilots
Pilots spend a lot of time together in tight quarters, so there's not much that doesn't get discussed at some point in the cockpit.
They talk about their families. They discuss their goals. They talk about places they want to visit and what they do in their off time. And, inevitably, they talk about what they're planning for the day they turn in their wings and retire.
That's the sort of conversation Gary Krasnov and Carl Youngdale particularly enjoy, not only because it's a passion of theirs, but it can bring them business as well. Beyond their jobs as pilots for Delta, they're also senior officials at RAA (formerly known as Retirement Advisors of America), a registered investment advisor firm that specializes in the challenges and goals of airline employees.
"When [you're] flying, you're in the cockpit with that person for eight, 10, 12, or 16 hours," said Youngdale, director of client services at RAA. "Money is something pilots like to talk about, so it's a topic that usually comes up in the cockpit."
Krasnov and Youngdale, along with Jeffrey Baumert (who's also still an active pilot and is chief operating officer of RAA), have been catering to pilots for almost two decades. In 1998, they launched Advisor Financial Services, a financial services company for airline employees. The business quickly grew and developed a loyal customer base. RAA was a friendly competitor with over 30 years of experience serving pilots, and eventually, merger discussions began. The two companies formally joined forces last year and currently manage resources of more than $2.5 billion for some 2,900 clients.
There are more than a dozen firms nationwide that cater to the airline industry, but RAA stands out due to its primary focus on pilots, which make up the majority of its customers.
That is, in part, because there's a lot more to most pilots than their work for the airlines. While it wouldn't occur to most passengers, a large percentage of the people who fly them back and forth across the country have a side gig going on as well.
"There are pilots who are attorneys, that practice law on the side, there are those with construction companies, or real estate; pretty much whatever you can imagine, there is a pilot doing it," said Krasnov, who serves as chief compliance officer for RAA.
That's due, in part, to the schedule pilots are required to keep and in part to their predilection for staying busy.
"If you look at a professional, commercial pilot, it's someone who's generally above average intelligence and a pretty motivated person," said Krasnov. "By law, we can only fly so many hours a month ̶ and the way our schedules are built, if you're flying a full schedule, it's 12-15 days a month. So, now, you're off for 15-18 days a month. [That's boring] if you're someone who doesn't like to sit still."
The majority of RAA's work is helping airline employees prepare for retirement. The company has no relationship with the airlines, focusing instead on the people who work there.
There have been plenty of changes in the last several years, too. When both RAA and Advisor Financial Services were founded, pilots were forced to retire at age 60. These days, it's 65. Pension plans, with defined benefits, are no longer the norm. (Delta employees lost theirs when the airline filed for bankruptcy in 2005.) Instead airline personnel now use 401(k) plans. And a number of pilots are former military personnel, so military benefits also have to be factored in atop the company retirement fund, pilot's salary, and any income from the client's side business.
While RAA doesn't do business planning for pilots (or others) who have LLCs, it does occasionally help them prepare for major purchases, which can range from a private aircraft to a second home.
When they do, the focus is always the same, said Youngdale.
"From my perspective, when a guy comes to me and says, 'I'm thinking about buying an airplane or obligating myself to serious debt,' my concern is 'how is that going to affect his retirement?'," he said. "That's the direction I take."
That said, Baumert, Krasnov, Youngdale and all of the advisors at RAA like to be as involved as possible with their clients' major financial decisions. While some pilots are still a long way from beginning their final approach on the golden years, they still face a number of uncertainties, just as they do in the cockpit. And, especially for those with a side business, there's a lot going on at one time.
RAA's job, said Youngdale, is to act as a financial version of air traffic control.
"We encourage all of our clients to use us a sounding board or, certainly, as a resource when it comes to all things financial," he said. "Anything that's related to that person's finances, we want to be involved, if they'll let us, as a resource."