Advisors have got to reframe, redefine and repackage what they do if they want to maintain revenue and keep clients after they retire, says Gail Graham, CEO of Graham Strategy.
Graham, who formerly led marketing at United Capital, told advisors at the 8th Annual Inside Retirement conference in Dallas that they need to redefine the client experience so that it's distinct from what they offered before clients retired.
Graham stressed that advisors will face more competition from big players like Vanguard, Fidelity and Schwab in providing investment advice, which advisors can't offer as cheaply as those firms can.
"I'm a huge advocate of beginning to separate your investment fees from your advice fees. I know it's going to be hard for us as an industry. I know it's going to be like all of us having to pull the Band-Aid off at the same time," said Graham. "But they are going to start advertising hard. ... Schwab is already doing it with its campaign 'Modern Wealth Management.' If they are modern, what are you?"
Still, an advisor who redefines relationships with clients can provide services that other competitors don't offer.
An advisor needs to become more of a retirement coach who helps clients identify and implement fulfilling choices for their later years, Graham maintained.
A first step in determining how to talk with different clients is to identify their emotional drivers, she said. United Capital, for example, created "The Money Mind" analysis to help assess clients and determine their values.
United Capital found there are basically three kinds of people: Some "people are driven by fear, and it's interesting that 90 percent of financial professionals we tested are fear based. That's why we are good shepherds of other people's money," Graham said. "The fear clients are afraid to retire and are terrified of retirement. The happiness people jump in and spend money. They have their glory days a bit too much. The last group are commitment people, clients who really are more concerned about the next generation, giving back and those kinds of things."
United Capital also found, after looking at more than 18,000 clients, that their number one goal was spending more time with people they love. Another top goal was not being a burden to family members.
She also suggested advisors explore AARP's website and specifically look at its extensive research that is part of its "Life Reimagined" effort, which offers tools that can help advisors help clients build a purpose statement for retirement.