Lessons Learned
McClanahan has been increasingly emphasizing to clients the importance of planning for a comfortable today and not just an uncertain tomorrow. She knows too well from working in emergency rooms that many people die or have bad things happen to them when they least expect it. She has also seen this among her clients.
One client, Susan (a pseudonym she used to protect her privacy in talking with Financial Advisor), and her husband had finished their planning with McClanahan—including their wills and health-care directives—a week before the husband, a nonsmoker in his early 50s, was given a diagnosis of lung cancer. McClanahan went into triage mode, helping him sort out his health coverage and the care he received in two states. “It was a really big support for him,” says Susan. “He was also grateful that she took us as clients so she’d be there for me.”
When he died, “I lost my anchor,” says Susan, now 53. “I’d been a housewife for 27 years—all my married life.” McClanahan came to her home every other week, she says, and helped her understand the bills, create a budget, sell properties and figure out how to pay for college for her youngest child. She also helped Susan with some details associated with shuttering her husband’s business. “Her goal is to help me keep simplifying things,” says Susan.
McClanahan connected her with an attorney, an accountant, a grief counselor and other clients, whom Susan befriended. “She’s a friend, a doctor, a financial planner and an advisor—she wears so many hats,” says Susan. “She hires people who are just as knowledgeable and compassionate.” Susan, who is now enrolled in college and working toward her own goals, says that McClanahan has also extended her services to Susan’s children, who are young adults.
McClanahan also impresses Brandon Ratzlaff, a wealth manager with Dallas-headquartered Carter Financial Management, which manages $800 million in assets for 457 clients. McClanahan spoke to the firm’s clients during its investment conference on Obamacare. Ratzlaff subsequently arranged for her to speak to his local chapter of the Financial Planning Association.
“She is an incredible planner,” he says. “She has a different skill set, and I respect that and I aspire to develop that.”
Thanks to McClanahan’s guidance, Carter Financial Management is now holding health-care conversations more regularly with its clients. Initially, “It really felt like none of my business,” says Ratzlaff, 36, “but that was less about the clients and more about me and my own mental roadblocks.” He finds face-to-face conversations to be much more effective than traditional work sheets and fact-finder questionnaires.
McClanahan has also been a good resource for Columbia, S.C.-based Abacus Planning Group, a fee-only wealth management firm that manages $832 million in assets for 192 clients. “She has a unique perspective and brings a lot of knowledge to the table that the rest of us don’t have,” says Molly Thomas, a registered paraplanner and the insurance strategist at Abacus. “She helps marry the two worlds,” adds Thomas, referring to the medical and financial sides of health care.
Abacus is now better able to help clients understand their medical records and what insurance companies look for in them. During open-enrollment periods, the firm reviews prescription drug cost options with clients, adds Thomas.
She finds McClanahan’s recent presentations on planning for health-care costs in retirement particularly useful. “How are we even supposed to start talking about that,” asks Thomas, “when someone who retires at 60 may live to 100?”
McClanahan has encouraged Abacus to ask clients open-ended questions about their health, including whether there is anything they’d like their planning team to know. These conversations help minimize surprises when doing financial planning—“Not that there’s a crystal ball,” says Thomas—and helps Abacus know how to have health-related conversations with clients’ children.
Abacus team members also do a lot of role-playing with one another to practice the best way to weave health care into conversations with clients, says Thomas.
McClanahan is thrilled that other advisors are stepping up their emphasis on health-care planning. “Our BHAG, or our big hairy audacious goal,” she says, “is to be a financial planning firm that other firms want to emulate.”