From the August 2007 issue of Boomer Market Advisor • Subscribe!

Vision quest - help boomer clients achieve their dreams

Baby boomers represent approximately 28 percent of the American population. Adults over the age of 50 own 70 percent of the country's financial assets. You can easily find them -- but can you tell a compelling story to make them clients? What makes you special? What advantages do you offer such a unique market -- product, process, approach? In my practice, I have made a significant investment in getting to know the boomer demographic. This investment includes market research, seminars, interviewing "boomer experts", trade shows, trade publications, plus trial and error. I have invested to learn more -- I have invested to become an expert. Here's what I've learned:

Number one, lose the word retirement from your vocabulary. Retirement is defined as "removal or withdrawal from service, office, or business; or withdrawal into privacy or seclusion." This definition does not work for most boomers. Most intend on remaining active. Retirement in their minds is not the end of the road. They have much more life to live. In "Wright Exit Strategy," author Bruce Wright calls this attitude "Visions of living the perfect calendar."

For example, when I want to know what a client is planning to do next, I ask it in this manner: "Mr. and Mrs. Jones, once you reach financial independence, what do you plan on doing with your time, talents and energy? What is your vision of the perfect calendar?" Be ready to take notes -- this simple question usually elicits a long and insightful response. How you handle the information will define your success.

For example, Bob and Susan worked together in Detroit. They both had C-level executive positions with advertising agencies in the prime of the automotive industry boom.

How do we get them to their perfect calendar? Let's run through a true-life situation that I recently handled in my firm.

Ages: Bob 57, Susan 55

Children: None

Current planning: Four 401(k) plans which had not been consolidated or actively managed, two traditional IRAs, two Roth IRAs, two individual IRAs, two individual on-qualified accounts and one trust account. They did not have long term care or a well structured, updated estate plan. No game plan, no road map.


Total Qualified Assets: $659,000

Total Non-Qualified Assets (not including trust): $180,000

Total Trust Assets: $155,000

Total Roth IRA Assets: $45,000

Primary Residence FMV: $350,000

Total assets: $1,389,000

Total liabilities: $225,000

Net worth: $1,164,000

I am sure many of you are looking at this case and already have a clear line of sight where to begin. It is at this moment where you need to refrain from diving into the mechanical part of the meeting. Before you show the prospect your genius of simplifying their investment and retirement accounts through consolidation and efficient management, provide solutions for their vision first. The most successful boomer advisors go beyond the mechanics of the plan and center all of their recommendations on the client's visions and/or definition of the best possible outcome.

In this case, the client's aspirations are:

1. Move to a warmer climate
2. Maintain a healthy, active lifestyle
3. Open two small businesses
4. Increase their financial awareness

With very little effort, you can help the client understand the process and steps involved. Delve deeper by asking the following questions:

1. Where do you want to live?
2. You must sell your home -- do you have a realtor?
3. When do you want to move?
4. What is your budget to buy a home in the new location -- do you have a plan?

You can see where this is leading. If you take the time to dissect the steps involved in accomplishing their vision, you have now made your process and your approach personally relevant to the prospective boomer client. At this point it is not about maximizing their returns with the least amount of risk; it's about managing their successes as they have defined them.

Naturally there is a separation in this approach. Their visions and goals are only the first part. The second part is asset management. At this point it should be easy to tie the strategies, tactics and tools to manage their assets in a way that realizes their visions and goals. The prospect will have a better understanding why you are making such recommendation, because it is personally relevant, and they will have a higher level of comfort and trust.

What was the outcome of the case we've discussed?


1. Clients sold their home in Detroit, Mich. and moved to Cave Creek, Ariz. They bought a smaller townhome for less money, freeing up additional assets to invest for their future.

2. They chose Arizona because of the warm year-round climate. It was conducive to maintaining their good health and remaining active.

3. They opened two small businesses out of their new home, partly financed with the proceeds from the sale of their Michigan home. One business was marketing design and advertising. The other business is executive coaching.

4. I, the financial advisor, send over financial topics every month to help to increase their financial awareness.

They have accomplished all of their visions to this point. Keep in mind the market and the portfolio returns have nothing to do with the successes they have experienced working with me. If you help them reach their visions, they become more than clients.

Asset strategy

1. Consolidated the four 401(k) plans and two Traditional IRAs into two Rollover IRAs. We set up the accounts as fee-based, managed accounts at 1 percent.

2. Worked with estate planning attorney and we updated their trust. Once the trust was updated we consolidated the two individual accounts with the trust account. The accounts were set up as fee-based, managed accounts at 1 percent.

3. Transferred Roth IRAs and the accounts were set up as fee-based, managed accounts at 1 percent.

Liability strategy

1. After the sale of their home in Detroit, the mortgage was paid off with $50,000additional dollars added to their trust account.

2. Clients were able to purchase their new home free and clear (no debt).

Final analysis

Outcome: Bob and Susan become clients

Qualified AUM: $659,000 at 1 percent

Non-qualified AUM: $285,000 at 1 percent

ROTHs AUM: $45,000 at 1 percent

Total AUM at 1 percent: $989,000

Total GDC: $9,890 per year

LTC insurance: 2 policies

Commission total: $4,200

Many of you may have a different plan that would be equal to helping the client accomplish their visions and goals. The point of this example is to walk through a process that is very effective as it relates to the boomer market. Start by listening to their real needs and wants. Remember the agenda - it is, after all, their agenda. Make the whole experience personally relevant before you move into the mechanical part of the plan. Far too often we are quick to show the better way as it relates to the assets. If you dive in, you forgot the clients' big picture ambitions, and you will become part of the noise the boomers experience everyday. Make a plan which details deadlines, milestones and accountability. Be different: manage their successes and help them avoid negative life experiences.

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