Like a good marriage, successful pre-retirement planning starts with a mutual commitmentand the similarities dont end there. During my 14 years in financial services, and particularly over the past few years when Ive placed a heavy emphasis on pre-retirement planning, Ive found many areas where my job mirrors my marriage.
It all starts with commitment and grows from there. When I meet a prospect, I say, “I am asking for a lifetime partnership.” I think this helps separate me from my competition, because I dont think most financial services representatives ask for that.
Today, I wont start a relationship with a new client without that mutual commitment. I want my client just as excited about what we can accomplish with our new relationship as I am.
With mutual commitment, which encompasses trust and open lines of communication, we can accomplish great things together to secure and grow a wonderful retirement for the client.
Recognizing the Need
My focus on pre-retirement planning reflects the growing need for this service by increasing numbers of people, led by the baby boomers entering retirement age.
Pre-retirement planning starts for my clients in their early 50s and continues into their 60s. I begin the process 5 to 7 years out and get them to make a commitment regarding the date they want to retire and the retirement lifestyle they are seeking.
Ive found that commonalities among people in this age group, whether they come to me through seminars or referrals, include that:
? They come with assets and a desire to figure out what to do with them;
? They seek information and education on how best to leverage their assets;
? They want to verify when they can retire and maintain the lifestyle they are used to; and
? They want to ensure they dont outlive what they have.
Serving Pre-Retirement Clients
Whether my pre-retirement people are new to me or are my long-standing clients now entering their pre-retirement years, I tell them these next several years are going to be critical in planning and implementing their successful retirement. Particularly with new clients, I ask tough questionsfor example, questions about what they would do in the event of the unexpected death or disability of a spouseto test their commitment.
Let your common sense and creativity be your guide in asking these questions. Remember that youre the financial advocate for not only your client, but also their dependents.
Even with clients Ive had for years, I let them know were entering an extremely important phase of our relationship, a phase that will take them out several years to their retirement at the age they specify. I tell them we will work together in such areas as:
? Pensions. Leveraging of the pension can involve life insurance and, typically, a review of their trust(s) in conjunction with their attorney.
? Asset allocation and re-allocation. These should reflect changing needs as the retirement date approaches.
? Funding sources. For example, is an annuity chassis on top of the IRA appropriate?
? Roth IRAs. Does conversion to this investment vehicle make sense?
? Minimum distributions. Should the client start taking minimum distributions before age 70?
Throughout this process, my organization stresses that the entire process is about them. Our mission is meeting their retirement objectives.
Setting up a timeline
Ive found that a timeline is essential to providing the best service to clients. With a timeline, I project the work my client and I will be doing together 4 to 6 years into the future. The timeline is established and backed up by all of the information the client provides, which we keep on a computerized data system in our office.
By following this timeline, I am not only keeping on top of my clients changing needs as they approach retirement, I also am creating future business in the pipeline. From the timeline, we came up with the idea of building our Potential Future Business List.
Now, when I meet with clients, I identify business for this year, 2005 and 2006. Currently, I have about $250,000 of potential business on that list just for 2004, including life insurance, investments, disability income insurance, annuities and long term care insurance.
In addition, we use a time-focus system that schedules all of my timework days, focus days and play daysfor 365 days a year. All of these systems keep me focused on my clients and help us keep our pre-retirement clients on track to meet their objectives.
Staying in Touch
As in marriage, communication is a key to keeping your relationship with clients healthy. This is especially true with pre-retirement clients, whose needs can change often during this periodand who cant afford mistakes.
One thing all of us learn during our financial services career is that some of our top-tier clients want frequent contact and others dont. Its our job to get to know their preferences.
I use the same basic approach, however, for all of these clients:
–Listen to their priorities.
–Define what the follow-up will be.
–Provide optional value-added services. For example, many of my clients have 401(k) plans at work, and I offer to review them quarterly or semi-annually. This approach provides an appropriate reason to communicate with clients and ensure they stay on track or get back on track.
When Its Time to Retire
When you stay in front of your clients faithfully during their pre-retirement years, youre the one they think of when pre-retirement is over. When their retirement date arrives, they have no doubt about who to call to handle the transition to their new lives, including the rollover of their 401(k) and the handling of other assets.
Who to call? Theyll call the financial partner who made the mutual commitment to them years agothe person who fulfilled that commitment professionally, with a passion and always with their interests in mind. Theyll call you!
Heather Moir-Dangler, CLU, is a 14-year agent at New England Financials Hawaii agency in Honolulu. She can be reached at [email protected].
Reproduced from National Underwriter Edition, October 7, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.