Financial advisors need to talk to their clients about health care costs during their retirement years or risk losing them to someone who is willing to have the discussion, says Nationwide Financial.
Many advisors are not having the discussion because they do not have the knowledge they need to offer solutions, according to a new Nationwide Financial survey. Four in five advisors acknowledge their clients are more likely to stay with them if they do have the discussion.
According to the survey, 43 percent of advisors say their clients show little interest in discussing health care costs. An equal number say they do not have the proper tools or information to estimate their clients' costs for health care in retirement.
"There are not enough advisors right now talking about future health care costs with their clients, but more will soon learn how-or risk losing customers to an advisor who can," says John Carter, Nationwide Financial president of distribution and sales.
The survey was taken of 501 advisors with at least half of their clients having $250,000 in investable assets.
Nearly three fourths of advisors say their clients do not realize how crucial it is to plan for health care costs in retirement and, on average, more than half of the clients do not have a plan to pay for those costs, Nationwide says.
Retirees today face what may seem to be insurmountable challenges in paying for their future out-of-pocket health care costs, the survey says. Our-of-pocket health care costs for the average 65-year-old couple can reach $240,000 over 20 years, plus the cost of long-term care.
"Currently many advisors will use their clients' assumptions of their future health care costs to develop a retirement income plan," says Kevin McGarry, Nationwide Financials' director of retirement income strategies. "However, four in five clients underestimate their health care costs."
Nationwide Financial has a Personalized Health Care Assessment program to help advisors plan for their clients' needs. Additional information is available at www.nationwidefinancial.com/healthcare.