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

Changing language, changing conversations

Financial planning is more than simply numbers. Any good investment professional can crunch numbers, but there are calculators that do the same. Today, experienced financial advisors compete against the media, blogs, popular personalities and the client's family and friends who offer so-called financial advice. To gain the same level of trust that people have with their pediatrician or psychologist, financial advisors must truly understand the nature of their clients' changing lives. This means asking thought-provoking questions that go beyond the numbers: "How do you plan to pursue your passions?" "Where do you dream of going?" and "How will you leave your lasting mark?"

Alan Webber, co-founder of Fast Company magazine, recently said, "when you change the language, you change the conversation." In recent years, Unilever's Dove represents one company that I believe has successfully changed its language and therefore the conversations with consumers. Dove's marketing has challenged the stereotypical view of what beauty is. They have tested the community's views on aging, body shape and race by using ordinary women in their advertising. No super-models. No waifish girls. Just real women, as they are, in all sizes, spots and wrinkles. Dove demonstrates the power of language. When framed in an effective and emotional manner, consumer perceptions and mindsets can be changed.

Understanding the pressures of the sandwich generation

Today's boomers face a retirement unlike any generation before them. They are enjoying longer and healthier lives and the prospect of a 30-year retirement. But, the current legislative and corporate environment means that Social Security, company pensions and healthcare are no longer guaranteed benefits. In addition, boomers are sandwiched between two generations, and have a degree of financial responsibility for both their children as well as their aging parents.

A recent study conducted by Ameriprise, entitled Money Across Generations found that a substantial number of affluent boomers are helping their adult children in a number of ways -- paying college loans and credit card debts, making mortgage and car payments or allowing them to move home and live rent free. At the same time boomers may be helping parents pay for groceries, medical expenses, utility bills, or adding an extra room for parents who can no longer live alone.

Advisors should ask probing questions about the family: "Are your parents in good health?" "What are their plans for long-term care?" "Are your children financially independent?" "What is your opinion about letting them live with you or providing financial support if they are in need?" The answers to these questions will help the advisor better understand their client and allow them to plan for the future impact of family obligations.

Confronting taboos

Getting these answers assumes these conversations are happening in the home. This is not always the case. Boomers are the generation that created the so-called "information revolution." Yet, when it comes to money, they're similar to the "silent generation" of their parents - it's a taboo topic.

The Ameriprise study found that conversations about money are not happening as often as they should. Only 4 in 10 boomers talk with their families about money and finances on a regular basis, and even fewer parents of boomers say the same. While boomers seem to be talking with their aging parents, they're not talking with their adult children to the same extent, even though the magnitude of the financial support boomers provide to them is greater.

We were encouraged to see that there is an increasing openness to financial conversations in progressively younger generations. This creates an opportunity for advisors by initiating the conversation. It allows the advisor to better understand their clients, while helping to gain the trust of extended family members.

Regardless of how the conversation takes place one thing is clear -- advisors need to engage clients in both a rational and emotional conversation. Going beyond the numbers is the key to better understanding clients and remaining relevant with families, and their financial lives.

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