When clients (or potential clients) think about working with a financial advisor, it’s a monumental decision—unlike most other decisions they’ll face. What other product or service carries this level of emotional impact? Certainly buying a car or a house is an emotional event but doesn’t compare to turning over the trust regarding the fruits of a lifetime of labor. The impact of hiring someone whose reach will impact the ongoing quality of that person’s life cannot be understated or underestimated. While the industry talks a lot about relationships between advisors and their clients, some still rely on sales processes that have their origins in selling boxes of soap and tubes of toothpaste. Needless to say, as the most successful advisor knows, that approach doesn’t work anymore.
According to SmartAdvisor, in cities, more than 25 percent of people over the age of 65 continue to work. I guess this shouldn’t be surprising based on the estimate by the Bureau of Labor Statistics that in just a few years––2031––more than a third of this age group will still be working. In fact, if you haven’t already, you may want to stop asking clients when they want to stop working and start retiring. It’s just not that relevant anymore, and it definitely isn’t a clear case of “before” and “after.” Instead, make sure your clients are prepared for the transitions that lie ahead.
When it comes to retirement, there are transitions and lifestyle changes, but the old definition of retirement no longer applies. If some of your clients truly want to stop working completely, make sure you prepare a plan for what they’re going to do––in addition to the amount of money they need to have.
Every client’s story is different, meaning their definition of retirement will also be different. As the evidence demonstrates, more and more people are deciding to either keep working, or develop a hybrid model that involves working and pursuing other activities.
It’s time to shift the conversation away from, “How old are you, how much do you have, and when do you want to retire?” Instead, focus on getting to know your client’s story. By understanding where they came from, what they’ve been through, and where they see their future, you’ll be able to come up with a plan that not only helps them meet their goals financially, but also at an individual level. After all, money without meaning is a hollow objective.
In Your Client’s Story, Scott West and I talk about the importance of understanding your client beyond focusing on “the number.” After all, none of us should be defined by our net worth or AUM. Instead, we should be defined by who we are, and the lives we’ve lived.
People “retire” for any number of reasons, but the one that seems to keep coming up the most in my talks with individuals and presentations to advisors is an out-of-balance life. People Scott and I spoke to while conducting the research for the most recent edition of our book were especially interested in successfully aging through physical health (diet, exercise, and activity) and mental health (challenge and curiosity). Having purpose and giving back were themes that came up over and over. When you engage in dialogues with clients, be sure you pay attention to getting to know these factors as well as the financial ones.
Yes, people work because they have to––but that’s almost never the sole reason. They are almost always also looking for purposeful engagement and have a deep need to make a lasting mark on the world.
As we discussed in earlier newsletters, the key to successfully engage with clients includes asking the right questions as well as identifying the risks of stereotyping different generations. Understanding that none of us is defined by how much we have, is the third leg of this three-legged stool. As we all know, a three-legged stool can sometimes be a little wobbly, so it’s up to you to make sure it doesn’t collapse!
Remember, there is a multigenerational dramatic story linked to each individual’s money: stories of hard work, sacrifice, risks taken, miserable failure, and fortuitous breaks. These stories carry on through them and the next generations and dreams they spawn. The most successful advisors understand how to harness the power of these stories.
