Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
A prominent retired financial advisor from a large institution told me the following:
Financial advisors are not interested in retired people. They’re taking money out. The advisors are interested in investors who are putting money in, not the other way around.
Just hearing this generalization, whether true or not, gave me a sick feeling in the pit of my stomach. Millions of Boomers fall into the retired category. If their advisors lose interest in them when they are no longer increasing their investments, where does that leave the retired person in need of advice?
The generalization is a form of age discrimination.
As a professional devoted to the well-being, financial safety and quality of life of older adults, I can only hope the statements I heard about lack of interest are untrue. I have met plenty of financial advisors who are indeed interested in maintaining their relationships with their oldest clients, whether or not the portfolio is increasing. They care about their clients. For them, it’s not just an empty advertising slogan. I hope this is the majority!
Millions of clients served by advisors will retire soon or are already in that phase of their lives. Competent, ethical financial advisors will increase their skills in planning for lifespans for their clients who will live into their 90s and beyond. No logarithm nor mathematical table will do a complete job of this.
Here are some of the areas involved in longevity planning that the best advisors will fully understand by their increased training and preparation:
- How to maximize the benefits of Social Security
Particularly with married couples, this requires specialized knowledge in order to give appropriate advice. When I asked my own long-time broker-dealer representative at our financial institution about it, he was very vague and couldn’t even refer me to anyone who could answer questions my husband and I raised. We fired him. We found an independent advisor who was very knowledgeable about Social Security. We referred three other people to this new advisor since then and all became his clients. Take heed. Word spreads.
- Long term care planning
Telling a client who is reluctant to purchase long-term care insurance that self-insuring is a choice is fine, but the longevity advisor understands how to address the risk of needing long-term care and has actual figures at hand to spell this out for the client. If this is not your area of expertise, you can get a clear understanding of the costs of all types of long term care in my book, Hidden Truths About Retirement & Long Term Care. About 70% of people will need some long-term care at some point. Know what it costs.
- The nexus between financial and estate planning
The disconnect between the financial advisor and the client’s estate planning attorney never fails to surprise me. They should be working together to ensure that the client’s later years are financially safe. Successor trustees should be known by both the advisor and the lawyer, so that if a client begins to show cognitive decline, they can coordinate efforts to have the named successor take over decision making at the appropriate time. If you are worried about the confidentiality of protected information, get the client’s permission in advance of any impairments, to communicate with the attorney involved. In other words, do this at the time of retirement.
- Targeting relationship building with the next generation
A loss of interest in a retired client deprives the advisor of a huge opportunity: to establish a connection to and trust with your retired client’s heirs. Have you even spoken with any of them at the point of the aging investor’s retirement? If not, you know why about 80% of the heirs move their inherited assets to someone else after the patriarch or matriarch dies. The heirs can get to know you well in advance if you invite them, with your client’s permission, of course, into the planning conversations. Don’t lose that chance.
The older client needs the skill the financial advisor has and retirement should not change the advisor’s interest level. Keeping clients for life takes an understanding of longevity. Make it your business to do just that.
Carolyn Rosenblatt, RN, is an elder law attorney. More information about her and her services can be found at AgingInvestor.com.
More Mutual Funds Topics >
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.