A Recently Widowed Client With Adult Children
Another client of my old firm, let’s call him Bill, was an engineer and also a very confident investor. He built computers and did the taxes. He brushed off his financial advisor’s suggestions about managed accounts and income products with the firm. The advisor assigned to him wrote him off as a poor prospect for planning. But after he died, his wife, we’ll call her Jackie, engaged fully with the advisor at the suggestion of her oldest daughter. Seeking to save her children the stress of watching over her finances, Jackie opted for both a professionally managed account and protected income solutions, a complete turnabout from Bill’s approach.
'Gray' Divorce Creating Financial Insecurity
Divorce rates are rising again across the board (thank you, Covid-19) but older people are divorcing at higher rates. Whether it’s gray divorce or splits among younger people, it can put a severe strain on anybody’s retirement savings, and when you or your team members are asked to help in these situations, you must be ready to demonstrate empathy and perform solid analysis. It doesn’t matter how wealthy the families are. Divorce at any level of wealth invokes intense emotions and intergenerational conflicts.
Retirees Worried About Healthcare Costs
Health is the No. 1 priority of clients across all adult age groups—health, wellness and the financing of healthcare. They have to ask themselves if their documents are in order and who will be the medical proxies making their decisions. How will they arrange financing for their health—with Medicare or long-term care? How will they be able to customize cost estimates using local rates of healthcare costs, their family health history and longevity projections? I work with Whealthcareplan.com to confirm significant differences by county, which is important, especially if clients are considering different locations for “retirement.” Advisors often turn to national surveys to answer those questions, even though these things often require local answers. We can do better.
Older Adults Want To Age In Place
My mother is an 87-year-old widow with limited mobility but a sharp brain. She resists assisted living because she believes she’ll lose independence. Losing her home also means giving up her car. But her safety, and that of other people, is more important. And it’s likely that her expectations are going to be more ingrained as she ages.
Situations like this require retirement advisors to have proactive discussions, early on, with seniors about their living transitions. The talks should come well in advance of the proximate need. There is a widely held belief that people can age in place if they get in-home care. But as the pandemic showed, we can’t assume that caregivers will always be available. In fact, qualified, reliable and trustworthy caregivers will likely be scarcer than top financial advisors.
“These life moments are like dominoes. If one falls, the others tend to follow,” says Tom West, an advisor and council member of Next Chapter, our retirement think tank. Of course, this work is no game, and there may be no more valuable “moments” for financial advisors to prove their value.
As a start, you can tell clients these stories and query each of them on what their preferences and game plan will be. Let the games begin.
Steve Gresham is CEO and founder of the Execution Project LLC and managing partner of Next Chapter. He was formerly head of the Private Client Group at Fidelity Investments. He also serves as senior educational advisor to the Alliance for Lifetime Income and is the author of The New Advisor for Life.