Their Nest Egg In Dollars
Clients are no longer going to turn money over to you just because you say you offer superior service or investment acumen. You can help them achieve better financial results without more risk if you can use these conversations about Social Security benefits and rollovers as a lever. And you can use current technology to show them how much larger their nest egg will be with tax and cost savings.
The rollover is the spark that will lead to the clients consolidating their assets with you. Most people come to advisors with a hodgepodge of retirement accounts and investments they acquired over time. In the aggregate, these are held at various places. There is little rhyme or reason in the places they’ve kept their assets or how they’ve allocated them.
So a rollover can be the spark that leads to what they want to do anyway—consolidate all their money under an advisor’s care for greater cost, risk, efficiency and administrative simplicity.
This sounds elementary, and many advisors say, “We already do this. What are you talking about?” Not quite. Morgan Stanley boasts over $2.5 trillion in managed assets. Their clients hold an additional $2 trillion elsewhere. With a sample size that large, it is fair to say that most advisors could achieve more wallet share.
To do that, they need the incoming throng of boomer retirees to buy in, and they need to demonstrate that the rollover process is as easy as it is profitable.
Quantifying Financial Value
It cannot be done “by hand.” Take it from my colleague Paul Samuelson, whose late father—a Nobel prize-winning economist and advisor to five presidents—could not chart a long-term retirement plan without costly missteps.
Why? Because retirement income is complicated. It requires a coordinated approach to tax-smart asset location and the way assets are allocated when clients are accumulating. It requires an optimal sequence of withdrawals from Social Security, annuities, investment accounts and other income sources during retirement. All this can be maximized and quantified to produce improved outcomes for both the investor and the advisor.
As baby boomers retire in droves and “money in motion” continues to accelerate, the industry’s biggest platforms are building digital means to capture client rollovers, answer Social Security questions and suggest intelligent withdrawal sequences. And these platforms will show how much more money the investor—and the advisor—would have by consolidating assets in one place.
These innovations cannot come soon enough. Guiding investors responsibly through retirement will be the work of our lifetime.
Jack Sharry is co-chair of the Money Management Institute’s Digital Advice Community, sits on the Next Chapter Advisory Council, is host of the “WealthTech on Deck” podcast, and is the executive vice president of LifeYield. Learn more at www.LifeYield.com.