You might already think you do that. After all, it’s kind of the selling point for many financial advisors! Not only can you help them project the amount of money they need in retirement and invest the money to achieve those goals, you probably also have a trusted network of other professional service providers, like estate lawyers and accountants, that can help them with other important areas of financial well being. You assist with Social Security claiming strategies, answer questions about the markets, and stop them from making poor decisions based on short-term emotion that will keep them from achieving their long-term goals.
But is that the whole story? Does that prepare clients for retirement? A 2017 study by the Employee Benefit Research Institute showed that only 18% of American workers feel very confident that they will have enough money to live comfortably in retirement. Where is the disconnect? How can financial advisors make sure that their clients are confident and prepared for the realities of retirement? How can an advisor give clients a whole solution?
Amazon Home Services is a great example of a whole solution, not just a product. Let’s say you need a new sink. Amazon wants you to say out loud “Alexa, I need a new sink,” buy it with one click, have it shipped to your home within two days, and schedule a licensed plumber who has access to your home via Amazon Key to install it. The whole transaction may one day be absolutely seamless (assuming Alexa doesn’t misunderstand you and play a song instead). Amazon wants to make it easy for you to use their service – so easy that you wouldn’t consider “doing it yourself” (i.e. researching a sink, ordering one, hiring a plumber, and arranging for a time when you are home to let him in to install it).
Now apply that to preparing financial advisory clients for retirement. What other services can an advisor connect clients with? What are some pressing but unexpected issues in retirement that a savvy advisor can anticipate and help them navigate? The speaker gave two great examples.
- 50+% of all home improvement spending in 2015 was done by people aged 55 and older, and this number is only projected to get larger in the coming decade (up to 56.3% in 2025, according to this Harvard study). Do you have any home contractors that you can recommend to them? Going one step further, consider that your clients may want to stay in this home as they age – perhaps they don’t have adult children willing to take them in, or they want to remain independent, or they want to put off the cost of an assisted living facility until they have no other choice. There are contractors who specialize in making adjustments to homes that allow for aging in place – called, yes, “Certified Aging-in-Place Specialists”. Do you know any? Do you think your clients might be interested in learning about this through a seminar?
- Do you know the top three expenses in retirement? Our luncheon group got two of them right off the bat: housing (#1) and medical care (#3). What is #2? Transportation. You’ve probably discussed the rising cost of medical care and the cost of assisted living or full-time care facilities with your clients – both are important factors when modeling projected retirement expenses. But how about transportation costs when clients are no longer able to drive themselves to appointments? How much might your clients expect to spend in this category? How can you connect them with this information?
With that in mind, how can an advisor move towards providing a holistic retirement solution? Consider adding the following to your professional network of referrals:
- Geriatric care managers or senior advocates
- “Aging-in-place” certified contractors
- Senior move managers to assist clients who are forced after a medical emergency to leave their home
- Technology experts who train older people in using new technology
- A trusted handyman who can perform simple tasks around the home, like changing light bulbs
(As an added bonus, some of these sound like excellent ways for your newly retired clients to work a few days a week providing consulting, research, or support services!)
Some of this seems outside of the purview of financial planning – but maybe not. After all, you are a trusted advisor. All of these needs in retirement cost money, all of this causes stress on the family, and you are in a great position to offer referrals to services that help clients through some of the more unpleasant realities of retiring and growing older. This is a great way to engage the family, and it distinguishes you from the competition (including robo-advisors). A study by SEI and FP Transitions also showed that advisors who spent more time on client engagement and acquisition were able to translate that into asset growth and revenue growth. The list of benefits goes on.
Of course, increasing the time spent on client engagement may leave less for other responsibilities, like selecting investment managers and building portfolios. Are you considering hiring an outside investment expert so you can focus more of your time on client service? Give us a call!