From the April 2008 issue of Boomer Market Advisor • Subscribe!

Kathleen Casey-Kirschling, your next client

If the name Kathleen Casey-Kirschling doesn't ring a bell, read on. Casey-Kirschling won the genetic lottery by becoming the first baby born just a few seconds past midnight on January 1, 1946, making her the first recorded baby boomer. A retired school teacher, she made headlines on October 15, 2007, as she filed for her Social Security benefits.

Serving as a vanguard of the nation's most-documented generation, her progress through retirement will be on display, especially as more and more of her compatriots head into retirement. Let's face it; there are a lot of Casey-Kirschlings out there -- which means more opportunity for your business.

Let's take a closer look at some of the more significant demographic aspects of this generation. According to a 2006 Phoenix Wealth Survey, of the more than 1,600 high-net-worth individuals studied:

  • Most are middle-aged and concentrated in the 45-65 age range.

  • They have an average net worth of $1.5 million and an average income of $141,000.

  • 84 percent are married (the national average is 56 percent).

  • Nearly half are about to retire.

  • 40 percent are business owners.

  • 46 percent describe themselves as politically moderate, 37 percent as conservative, and 14 percent as liberal.

Their top financial concerns are:

  • Long-term care or other health costs erasing their savings

  • Maintaining their lifestyle in retirement and not running out of money

  • Preserving rather than accumulating assets

  • Estate and tax planning

From where I sit, one of the greatest advantages we have is that we can take notice of these statistics and emerging trends and adjust our business models accordingly.

Perhaps it's because Casey-Kirschling and her generation are now looking for a teacher, a guide, a goal seeker, or a coordinator, rather than an asset gatherer or manager. But the retiring baby boomers will no doubt offer us numerous opportunities in the future, and recognizing now how the industry is likely to adapt to changing demographics will be a key to positioning your business for success. Here are some notable changes in advisors' business models that are already taking place:

From To
Transparency of advisory fees Transparency of financial services
Focusing on investable assets Coordinating investable and noninvestable assets
Maintaining quantity of clients Cultivating quality of clients
Gathering more assets under management Focusing on/evaluating the relationship/ROI (Return on Investor)
Sole practitioner Team approach
Fee-based Advice-based
Semiannual investment/performance reviews Proactive wealth management data gathering and guidance
Investment proposals Pitch books (on your financial planning process)
Offering free services (as part of your advisory fee) Charging for your time and wisdom (with advisory and consulting fees)
Referrals from clients Referrals from your team of professionals
IPS (Investment Policy Statement) DPS (Distribution Policy Statement)
Reactively selling insurance Having an asset protection plan or process



Believe me, I'm still a big fan of investment advisory business -- and it's not going anywhere. But for many investors (i.e., baby boomers entering retirement), their accumulation-focused psyches are now ramping down and their primary goal is to find confidence in their financial situation; in preserving their assets to support their lifestyle throughout retirement. If these are your clients, it doesn't make sense to focus solely on investment management and performance reports, which can be more stressful than comforting -- especially in times of market volatility.

Developing and consistently using a financial planning process with clients and prospects will be equally, if not more, important.

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