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Help Clients Prepare for the (Very) Long Haul

Help Clients Prepare for the (Very) Long Haul

Nathan Tice

01-22-18

Looking at the big picture often reveals opportunities for growth. For example, did you know the number of people who say they are not financially prepared to live a long life is virtually the same as the number of people who are without a financial advisor? For independent financial advisors seeking to enhance their practices, this scenario is ready-made for action.

Opportunity: By the Numbers
The U.S. Centers for Disease Control puts the average life expectancy in this country at nearly 79 years. Since that number is mathematically in the middle, one-in-every two people will wind up living many years beyond that benchmark. As one point of reference, a century ago the average age of death was around 50.

But it is quite clear from other statistics that financial life expectancy has not kept pace with this trend. A large majority of respondents to an Allianz Life Insurance Company of North America survey found that 70 percent did not feel financially prepared to live to age 100. And the same survey found 72 percent do not have a financial adviser. The latter point is backed up by a Harris Poll that found 68 percent of respondents said they did not have a trusted advisor who offered comprehensive lifetime financial planning.

What does this mean for financial planners and investment advisors? You should give serious consideration to marketing your services to this large base of potential new customers.

Earn Trust to Attract New Clients and Retain Current Clients
Respondents to that Allianz survey said they would be more willing to seek a financial professional if they helped find solutions that could create guaranteed income for life (47 percent), helped plan for and fund a longer life (34 percent), and helped with finances throughout life stages (31 percent). Fear of running out of money is possibly preventing them from taking appropriate risks that might ultimately lead to a more fulfilled life. Consider what solutions your financial practice might offer to help lower their anxiety levels.

The list of issues that concern people is daunting. Consider the Baby Boomer generation, which started reaching retirement age a few years ago. Evidence posted in an article on The Motley Fool website suggests this group plans to rely heavily on Social Security, has likely either stopped contributing to retirement accounts or has no retirement savings at all, probably carries too much debt and might actually postpone retirement. People facing these issues, while having lost a lot of time saving or investing, still could have a lot of years in front of them. They could certainly use a trusted advisor. For instance, even if they are not working with one, an advisor could help them determine the best method for taking Social Security distributions, especially if they have other taxable or non-taxable assets. They may find that drawing from their investment accounts differently can save money by keeping them purposely in a lower bracket. These strategies are not always possible, but a financial advisor could at least look at the options the client has available.

But the same holds for your current clients. The Harris Poll mentioned above found that only slightly more than 40 percent of respondents who reported working with a financial professional believe their advisor had a long-term commitment and provided tailored attention. So, take measures to ensure you meet with clients regularly to help them understand their complete financial picture. Show them you are truly interested in building a trusted relationship. Demonstrate that dedication with your financial expertise plus the necessary products and tools to build long-term plans.

Make the case that longer lifespans require solid financial planning. People without a financial advisor indicate they’d be willing to hire someone if they could provide solutions for finances throughout the various, and longer, stages of life. Every current and prospective client is different and has unique needs. Help them meet those needs with tailored solutions and your own practice will benefit as well.