Consider the beginning of the bull market. In 2009, the median age of a boomer advisory client was 53. At that age, most people are still in their peak earnings years and have a hard time imagining a far-off retirement date or implementing a serious financial plan.
Today, the median age of that client cohort is 65. Those clients reveal in surveys that they are most concerned about retirement income, health care and longevity planning. And the No. 1 reason advisors lose top clients, according to the Investments & Wealth Institute, is that the clients die.
So we have become an industry of de facto retirement advisors, not investment managers, and we need to pivot to the real needs of our clientele. Are we really surprised when an unprepared 53-year-old accumulator turns into a new retiree having a financial anxiety attack at 65? Now add the extra worries of retiring during a global pandemic. And facing a 20% chance of cognitive impairment due to their age. Amid increasing rates of both divorce and suicide. It no longer matters whether investment returns have been stellar for the past 12 years.
To get ahead of those client concerns, advisors need to be proactive and know what their clients want to discuss—concepts that more reactive advisors won’t.
Consider becoming what I call “The New Advisor For Life,” or better yet, “The New Advisor for the Rest of Your Life.” Now you’re less a portfolio manager and more of a life manager. It’s a pivot, not a sea change. In many situations, your “client” relationship will include a family of as many as three to four generations and their “retirement” will be a family affair. Their financial needs will include their need for caregivers, and their plans will be stress-tested in real time, the weak spots illuminated.
Most of the work will be intuitive, as it was for Annemarie.
Will we answer the call?
Steve Gresham is a builder of new ideas as managing principal of the Execution Project, LLC, a consulting firm working to reshape wealth management and retirement for the age wave. He is also a senior education advisor to the Alliance for Lifetime Income. Steve served as head of the private client group at Fidelity Investments and is the author of The New Advisor for Life. See more at theexecutionproject.com.