To start, these new wellth managers understand that retirement planning can no longer be compartmentalized. In other words, we can’t just help clients institute certain rules for investing, mandate specific habits for saving, and in the process, let them sacrifice their health or relationships.
Clients need to know that they can’t selectively plan their way to—and through—retirement because at some point their health, relationships, mental strength and spirituality will come into play. It could happen on their first day of retirement or 20 years into it, but rest assured, they will cross that path when their lack of habits and discipline in others areas of life will be brought into question … and money won’t be the answer.
What’s exciting about this major transition is that new topics and paths for advice are opening up. Two of the most electrifying are retirement coaching and entrepreneurship.
Retirement coaching in its most basic format is a process for helping clients think about and plan for the non-financial aspects of retirement. It includes a process for making clients more aware of what they may face personally as they make the transition into retirement and helps them begin to adapt mentally and physically. It helps clients avoid wasting the first and most valuable years of retirement trying to figure it out on their own.
The other major trend underway is retirement-based entrepreneurship. Many of traditional retirement planning’s fatal flaws can be alleviated by starting a business because it not only provides many of the same things their work life offered, but done correctly, can also provide additional income to support longevity and health-care costs.
It also meets clients where they are at. Baby boomers, in particular, want to be a part of something bigger than themselves, they have a deep desire to have a positive impact on others and are usually harboring a passion or hobby they would love to turn into cash flow.
The concept also has a ton of appeal to advisors simply because they themselves are business owners. In other words, the learning curve to begin to provide advice or suggestions to people in this area has a low barrier for entry… plus it’s a ton of fun to talk shop.
The idea that traditional retirement planning is on its deathbed and may be hazardous to a client’s retirement well-being may mean more disclosure for advisors. Something similar to the Surgeon General’s warning on cigarettes being placed on the side or back of every financial planning binder: “Traditional planning by itself may be dangerous to your life in retirement and may cause a failed transition.”
While I don’t see regulatory agencies requiring this disclosure just yet, savvy advisors can get ahead of the curve by helping clients become more aware of traditional retirement planning’s fatal flaws. Furthermore, they can use the emerging concepts of retirement coaching and entrepreneurship to help deal with the tragic loss of it, and in the process, breathe new life into their practice and clients.
Robert Laura is the president of SYNERGOS Financial Group, the founder of RetirementProject.org and the creator of the Retirement Wellness Report and DividendPaycheck.org. He can be reached at [email protected].