In the U.S., 43% of the 18-and-older population is single. Uncovering three facts and using some simple techniques can help you cement relationships with single clients.
When I first got into this business, a tried and true office rule was to "never" schedule a one-legged (single person) appointment. "Never" is tough word to live with, especially when you're new in the business and any warm body in front of you helps you keep your job. Proving the rule true, however, I rarely closed a deal when all the decision makers were not in the room together. Whenever the prospect had to "talk it over" with a spouse, family member or other professional, valuable time and energy were invariably wasted with very little to show for it.
Fast forward to 2011 and one-legged or single baby boomers are reviving the old cliché and becoming a huge issue for today's financial professionals. In fact, single boomers can be time-consuming and indecisive for a number of reasons, such as getting burned by an advisor in the past, falling behind in their savings due to the recent market collapse, not having a significant other or trusted family member/friend to consult with, or because they prefer to hide behind their long-time CPA or attorney. No matter what, advisors can put that old cliché behind them once and for all by better understanding the factors affecting single boomers and by using some simple strategies that foster awareness, trust and confidence.
Single Reality
According to the U.S. Census Bureau:
96.6 million or 43% of all U.S. residents 18 and older are unmarried.
53% of unmarried Americans 18 and older are women.
61% of U.S. singles have never been married, 24% were divorced, and 15% were widowed.
16.2 million or 17% of unmarried Americans are 65 and older.
Single people are definitely a force to be reckoned with, and like other client segments, single people can come with very different situations and capabilities. This makes it all the more important for advisors to develop specific techniques and client strategies that take into account why and how long they have been single, and who can or has helped them make important decisions in the past.
To begin with I suggest advisors gather the answers to these questions before an initial meeting. This, quite simply, better prepares them to meet the prospect's immediate needs and concerns before asking them to turn over their life savings to them. The answers will also help advisors classify single boomers into categories and then develop specific strategies for each. Think of this as similar to the process of classifying and then adjusting the direction of a meeting based on the client's dominant personality, i.e. driver, amiable, analytic, expressive, etc.
Take for example a recent divorcee who may have been the one who "didn't want to worry about investing" but is now forced to. Depending on the reasons for the divorce (never ask why if you like keeping meetings to less than an hour) they may want their assets far away from their ex, and as different as possible. Whereas a recently widowed person who, despite being the financial decision maker, may not have the emotional wherewithal to make any long-term decisions and, despite flashing warning signs, sees only a sentimental value in keeping everything the way it is (think banking stock widows). Or think about the never-married executive or business owner who wants to invest in a series of small start-up companies in spite of their CPA's warnings against it.
Taking inventory of why your client is single, how long they have been that way, and who they trust to help them make decisions provides an advisor with an immediate gauge as to a client's experience and comfort level with decision making. Successfully working with a single client will also require making additional contacts with those they trust and confide in, possibly before and after meeting with them. In fact, it's no different than the young man who has to win the approval from both a girl's parents and her friends before getting serious.
Uncovering these three simple facts can go a long way in saving advisors time and energy, while allowing them to better prepare for their meeting and developing steps for working together. In addition to recognizing these factors, advisors can use the following three simple techniques during the prospecting process to get more effective results with singles.
References
People enjoy working with and being around people who are like themselves. So, before a prospect asks for a reference, offer to refer them to clients who are similar to them and their situation, for example, pairing new singles with each other. Help them understand the connection by describing the reference in a way they can identify with. "Jane Doe lost her husband last year. She's a retired school teacher with plenty of funny stories about kids, and prefers conservative, income-oriented investments in order to spoil her grandkids for years to come."
Asset Allocation
Asset allocation is likely to be the biggest challenge advisors will face with single clients, especially those who don't have any concrete decision making capacity or experience. In addition to using traditional tools to establish asset allocation and risk tolerance, develop a review process that fosters a confident, trusting relationship. One approach might be to simply start with a couple of 30-day reviews, followed by progressively less-frequent meetings, such as every other month, then quarterly, and ultimately semi-annually. By doing so, advisors demonstrate follow-through on what they were asked to do as well as what they said they would do, which creates both trust and confidence in both the short-term and long-term aspects of the relationship.
Other Professionals
Many times, single people will want to talk things over with a family member, friend or other professional, such as a CPA or attorney. The client should, of course, be encouraged to consult with them but I suggest advisors also reach out to them with a clear explanation of their business model or unique value proposition, and address anyimmediate concerns or questions they may have. One way to simplify this process is to create a one-page advisor biography that includes your photo, years experience, credentials, philosophy, association and organization memberships, community involvement and, ideally, any recent media quotes or appearances. Then introduce yourself via a call or an email and send the one-sheet bio along for their review. Be sure to follow up within a couple days to make sure they received it and to see if they have any additional questions. I also like to touch base again in 30 days (especially with professionals) and ask if I can add them as a subscriber to my free newsletter.
No doubt single people carry a heavy burden and should absolutely be cautious in selecting an advisor. They are solely responsible for their financial security and emotional well-being throughout retirement. And while they may not need to consider anyone else's opinion in their decision-making, the trade-off is they can't automatically count on another salary, retirement savings plan or caregiver as they age, which makes it all the more critical that the decisions they do make are arrived at carefully and over time.
At the end of the day, don't let old and outdated office rules or clichés stop you from having successful relationships with one-legged prospects. They're a great source for business, both financially and emotionally because they appreciate the fact that you took the time and energy to understand them as a single person and as important part of your practice.
Robert Laura, president of SYNERGOS Financial group, a Michigan-based RIA, is the author of Naked Retirement and is the co-founder of the RetirementProject.org. A regular contributor to fa-mag.com, he provides Retirement Wellness Workshops for individuals, organizations, and employers. He can be reached at [email protected].