Lack of communication: Whether it is discussing retirement and long-term care plans as a family or receiving guidance from a well-versed financial advisor, opening the conversation between parents and adult-aged children can significantly improve their understanding of the future. In my experience, the biggest obstacles to a comfortable retirement are very often clients’ own children. There are many situations that cannot be overcome and require a holistic perspective outside of one’s portfolio, such as an illness. Sometimes the financial blows are avoidable, such as a hard-partying adult child who sees Mom and Dad as their personal ATM or the son or daughter that just cannot hold down a job and has come to rely on the soft landing their parents repeatedly offer. This is where the line between being a personal advocate and a financial advocate may blur. Watching your client’s assets dry up needlessly is painful for a dedicated financial advisor to watch. Use a little bit of tough love and point out that your clients’ money is going up in smoke, and fast. Suggesting that they have a straight talk with children or relatives about the reality of their means might save them from disaster.
Have a good plan. Then revisit it. Often: No financial professional can predict the future. Change is inevitable; a conscientious financial planner not only considers changes in the markets but also considers the changes in their clients’ personal lives. Check in with your clients’ intentions periodically. Revisiting my earlier point about longevity, ensuring that a longer life is also satisfying and healthful is still a struggle. A longer life means more opportunities to be impacted by divorce, increased health-care costs, and familial obligations. It may be that estate plan you drew up 10 years ago when you started working together is no longer valid. For instance, your client designated power-of-attorney to their late husband and put dear old Cousin Gertrude next in line, but Cousin Gertrude passed away last year. A “set-it-and-forget-it” plan is ideal, but is not the reality. This doesn’t mean revisiting your asset allocations seasonally, but check in on your clients’ charitable intent, their estate plan, their living will and other parts of their plan that might be more affected by changes in their personal lives.
As financial enthusiasts, it’s easy to get caught up in the facts and figures of our clients’ portfolio, but helping them prepare for retirement requires more than just looking at statements. While incorporating a saving strategy, cutting expenses and investing are all key players in improving your client’s retirement readiness, it’s important to remain responsive to the particularities of each client’s financial life as they progress towards retirement. Just as your client regularly visits their doctor for a health check, sitting down with a financial planner for a regular financial check-up should be a part of any well-managed financial plan.
Benjamin A. Tobias, CFP, CPA/PFS, CIMA, AIF, is the founder and president of Tobias Financial Advisors. He has been recognized by numerous publications over the years, including Worth Magazine as one of the “Top Wealth Advisors” for multiple years.