If you and your clients are still pinching yourselves after 153 months of rising stock prices, save room for more good times. The ride has been epic, but this bull run looks as if it could be ending in a china shop.
However, there’s another bull market out there just getting started. And this one is easier to control.
The OBM (Old Bull Market) was a historic opportunity to grow assets. The New Bull Market (NBM) is about protecting those gains. The winners in the OBM ignored market volatility and rode on. Many of the top OBM advisors kept clients invested to max out the market’s advance.
In the New Bull Market, many of the winners will have to ignore the anxiety of retirement and live on. The best advisors will now keep clients on track to max out their accumulated assets. In the Old Bull Market, you could get away with leveraging bullishness with options and margin. In the New Bull Market, you need to explore protecting client assets with insurance, annuities and credit.
The Old and New Bulls require a different perspective. In the Old Bull, you focused on the future. In the New Bull, you focus on today—and maybe tomorrow. In the Old Bull, you were a guide and a coach, leading the team. In the New Bull, you are still leading, but now you are more of a problem solver and a therapist. And the clients are mostly the same clients, though the typical one is now surrounded by three generations of family members you need to include.
The opportunities of the New Bull Market were created by the changing priorities, objectives and concerns of today’s investors. You know about the age wave of retiring baby boomers departing the workforce at 12,000 per day. They tell researchers they worry about five things:
• Paying for healthcare
• Outliving their money
• Falling markets
• Unexpected big bills
• Remaining independent (with a healthy brain and body).
These concerns form the basis of a New Bull Market advisory practice. In the old market, you were helping clients grow assets for unknown future costs. In the new market, the costs are increasingly known and you may have to stretch clients’ assets to meet those costs. In the OBM, you made investments and hoped they worked out. In the NBM, you create solutions that have to work out.
The winning advisors in the new market will earn their success. There are new tools they need to use to help clients through those five worries. New Bull Market winners will know the answers. They will be able to rattle off their most common solutions quickly and with confidence. That confidence will be a welcome contrast to advisors stuck in the Old Bull Market mindset. The leaders are now sharing their perspective with clients—on retaining assets, consolidating assets and earning referrals. The things you’ll be talking about in the future include:
• Long-term care strategies
• Longevity protection
• Protected income sources
• Liquidity through security-based lines of credit
• Financial wellness
Advisors who solve for the five needs will then face a second dimension of opportunity created in part by the bull market—scale. The Pareto principle is alive and well in financial advice: Fewer than 20% of clients will receive “full service” and even fewer will get complete financial plans. Clients are typically scattered across four to six providers—another outcome of the Old Bull Market.