Normalizing a client’s thoughts and behaviors is an important first step as it lowers barriers (helps them uncross their arms) and allows them to be open to some feedback as to how to begin to resolve their issue. The next step comes from another real estate term, providing collateral.
Like sweat equity, we all know what collateral is. It’s commonly defined as property or other asset that a borrower offers as a way for a lender to secure the loan. When it comes to retirement planning it means offering your clients tools and resources that clients can use to feel secure in their transition into retirement.
In this case, I asked the client, “Have you heard of the positive psychology movement?”
He turned his head and leaned in as the concept piqued his interest saying, “No, I haven’t heard about it.”
So I gave him a quick backstory, noting that about 20 years ago, Martin Seligman challenged the psychology community to start focusing on human flourishing rather than just disease. He suggested it was time to figure out what makes people thrive instead of just survive and as a result, came up with some scientific principles referred to as PERMA (positive emotions, engagement, relationships, meaning, accomplishment).
You could see his mood and attitude change as the very thing he was struggling with had scientific backing and was part of a major movement. The next step was crucial and is a place where I think many advisors struggle. I stopped the meeting by saying, give me one second to print off a guide you’re going to love that explains how to thrive in retirement using positive psychology. Even before, he could reply, his wife chimed in, “That sounds perfect.”
I also gave him a copy of my book, Retirement Rx, which is like a Chicken Soup For The Soul-type book and includes a collection of short stories to help people think about and prepare for the non-financial aspects of retirement.
The name of the guide or concept of the book isn’t what is so important here, but rather the idea of providing something physical or tangible that they can touch and hold from you is what is important. This non-financial sweat equity and collateral have always been important but in many cases hasn’t been needed as much over the last eight-year bull market run. I mean, let’s be honest, our clients are happy to see us a few times a year when the news is all good and everyone is making silly money.
But we all know markets can’t go straight up and if your relationship is 100 percent money and investing based, when things turn south, it’s easy for a client to question the value you provide and transition to another firm who is offering more than money management.
Along those lines, I have found two other tools that are very beneficial in adding sweat equity to my retirement plans: a couple’s quiz and legacy notebook.