by Mitch Anthony
If you’ve heard me speak or read my book, The New Retirementality, you know that the concept of retirement has changed dramatically from when it was first conceived. Now, more than ever, financial advisors have a crucial role to play when it comes to retirement planning that goes well beyond AUM.
Determining how much your clients need—their “number”—is mechanical. This “number” is the piece of financial planning that all financial advisors can provide, including robo-advisors or online software programs. In other words, it’s a commodity. The real value is in your ability to help clients get a better Return on Life™ (ROL) by understanding their number is a means to an end but not the ultimate goal. Retirement coaches get this: ROL planning is what helps them add value and stand out in a crowded marketplace.
Retirement coaching integrates health, wealth, work, and leisure. Money is still a critical piece (and always will be), but your clients can’t complete their retirement puzzle without the other pieces.
When it comes to retirement planning, it’s no longer enough to be able to tell your clients they have enough financial assets to retire. If you want an edge over other planners, you have the opportunity to go one step further by helping clients discover how that money can enrich their lives. Retirement coaching is based on the ROL philosophy: instead of focusing solely on how much money clients have, start the discussion by asking questions that can help those clients figure out how much life they have—and want to have—going forward. We’ll sample some questions throughout this article.
Research and statistics have shown that there are more and more of us living to the age of 100. That’s huge! This 100-year lifespan is having a massive effect on retirement planning, beginning with the impact of living in retirement for several decades, instead of several years. When the concept of retirement was first introduced, many people didn’t even make it to retirement because lifespans were so much shorter.
How can financial advisors add retirement coaching to their practices? It’s not as difficult as you may think. Start by coming up with a few questions to initiate some dialogue when meeting with your clients. In the Retirement Coaching programs Steve Sanduski and I conduct, we tell advisors to ask questions such as, “What advice would your 100-year-old self give to you today?” It’s a simple question that helps your clients think beyond a number, and to focus on what they want to do with their money once they have it.
Many of your clients probably envision retirement as a permanent vacation. While the “honeymoon stage” of vacation certainly sounds appealing, it quickly becomes boring after as little as a few months. Decades of sleeping in, playing golf, and taking walks sounds great as an escape when you’re in a grind, but become less fulfilling when they’re all you have.
Here are three observations to keep in mind as you transition from financial advisor to financial advisor and retirement coach:
- As mentioned above, the old retirement conversation was about funding retirement; the new conversation focuses first on what your clients’ goals are, and second, how much money they need to fulfill those goals. Ask your clients if they have a job or a calling. If they have a calling, maybe they shouldn’t retire completely. If they have a “job,” ask them what their calling is, and focus the conversation on how to achieve this calling beyond simply dropping out.
- In the past, most people did not live long in retirement. Today, people retire and can live for decades.
- Not that long ago, we could assume that “age was stage.” When you hit 55, 60, 65, you retired—end of story. That assumption is no longer true. The concept of retirement is very personalized, but most people are surprised when they realize they haven’t given much thought to what they will actually do once they move into that stage of life. Ask your clients to think about how they plan to spend their days in retirement. Then ask them if that’s how they want to spend 52 weeks a year for 10, 20, 30 or more years. This is a very eye-opening exercise!
An average of 10,000 boomers are transitioning into retirement every single day. More and more of us will live to see 100, and many more are rethinking what money means to them. There’s a reason Marie Kondo’s book, The Life-Changing Magic of Tidying Up has sold more than a million copies: people understand that there is more to life than accumulating material possessions. More and more of us are interested in experiences. The human need to contribute and feel involved doesn’t stop at 60, 70, 80 or even 90—and if anything, it grows stronger. Your clients may not even realize this because they have been focused on a number, but you have the opportunity to help them look at retirement differently.
As an advisor, you are on the front lines. The old conversation was about money; the new one is about time and money. You have the opportunity to make a significant impact in your clients’ lives. A dialogue focused on helping your clients know how they’re going to spend the time is as essential as the one about how they’re going to fund it.
As we live longer, we’re going to experience more—and different—stages and major life transitions. Committing to lifelong learning is important to living and retiring successfully. Working is part of that experience.
The lifeline is moving to the right. The traditional notion of working until 65 and then kicking back doesn’t apply very much anymore. Many people work because they can, and because they want to. Others may not have a choice. Regardless, endless idleness is not a goal at any stage in life.
I’ve had more advisors than not tell me they receive blank stares when they ask clients what retirement means to them because they haven’t given it much thought. Retirement coaching gives you the unique opportunity to change that.
© 2017 Mitch Anthony
Mitch Anthony is the founder and president of Advisor Insights Inc.and the Financial Life Planning Institute, the leading provider of financial life planning tools and programs for the financial services industry.
For almost two decades, Mitch and his team have provided training and development for both individual advisors and major organizations throughout the world. Mitch personally consults with many of the largest and most-recognizable names in the financial services industry on both financial life planning and relationship development.
Mitch is a consistently top-rated presenter who has spoken to groups ranging from 10 to more than 10,000. He has been named one of the financial services industry’s top “Movers & Shakers” for his pioneering work. Through the Institute, he has partnered with Texas Tech University, the University of Georgia, and Utah Valley University to develop financial life planning programs for their undergraduate programs.
Mitch is a sought-after expert for the media, and a regular columnist for Financial Advisor magazine. His columns have appeared on CBS MarketWatch and in the Journal of Financial Planning. His original comic strip “Stanley Brambles, CFG (Certified Financial Guru)” has appeared monthly in the print edition of Research magazine. Mitch is also host of the daily radio feature, The Daily Dose, heard on over 100 radio stations nationwide.
Mitch is also the author of many groundbreaking books for advisors and consumers, including perennial bestseller StorySelling for Financial Advisors, cited by “Financial Advisor” magazine as the number one “must-read” book for financial professionals. Mitch’s other books include The New Retirementality (now in its 4th edition), From the Boiler Room to the Living Room, Your Clients for Life, Your Client’s Story, and The Financial Lit-Kit: The Cash in the Hat, The Bean is Not Green, and Where Did the Money Go?. For information on these books and more resources, click here. Contact Mitch at [email protected].