Needed: Advisors Who Focus On The Whole Senior
While the timing may be debated, the fact that both Social Security and Medicare face a funding crisis is undeniable.
Although it is politically unpopular to change a legacy entitlement program, something must be done. But the mammoth trial balloon the federal government is floatingprivatization of Social Securitycannot replicate the benefits of the program now in place.
Worse, consumers face daunting issues because of lawmakers inability to fess up to boomer demands and needs. At many companies, sales of long term care products have declined notably over the past two years, but the need for supplemental coverage remains monumental.
Thats especially true if eligibility requirements for Social Security and Medicare changeas they will have toin the years ahead. Although most boomers recognize the term long term care, most are unfamiliar with the products features and benefits. And they often perceive the need for LTC to kick in only when they are of Social Security age.
Compounding this dilemma is the total lack of consumer understanding, and industry support, for one of the best product groups available to those who can afford it: disability insurance.
When you look at all three issuesthe need for Social Security reform, lack of customer understanding about long term care and the profound need for disability insurancethe industry has incredible opportunities to educate consumers. Advisors can use client meetings, presentations at chambers of commerce, media interviews, etc., to elevate awareness about the genuine good that insurance and financial products can generate for wealth management and asset protection.
But before we can educate others effectively, we must educate ourselves. We need to better understand the changes that our legislators propose and make sure our aging clients understand the impact these changes will have on their savings and investments. To communicate effectively with the senior market, we must understand the unique retirement distribution and estate planning challenges confronting mature Americans.
The aging baby boomer population represents a huge market for professional financial advisors. Seventy-seven million of them will start retiring in five years time. One-half of the boomers will retire over a five-year period, starting in 2009.
The growth of the senior market and of the financial challenges confronting older adults will give rise to a new breed of financial advisor, one who focuses exclusively on the financial needs of older Americans.
To be effective, the advisor must establish a relationship of trust with the client. To that end, the advisor must be well versed in the technical financial knowledge required to help seniors plan for their retirement years.
Effectively serving this senior population also will require advisors who understand and counsel their clients on the full range of options open to them during retirement. These individuals must focus on serving the whole senior.
In addition to learning about financial and medical issues, advisors must understand the psychological and sociological challenges related to aging, and key lifestyle issues including work, retirement and family relationships.
Advisors need to provide comfort to clients at a time when they are feeling confused, vulnerable and afraid of outliving their assets. It is important for advisors to assist seniors in protecting these assets from inflation, the economy, plus health and housing issues. To meet these challenges, financial advisors must learn more about seniors and the senior market.
Once we have accepted the challenge of educating ourselves, then we will be better prepared to be active and engaged social partners, ready to address the daunting hurdles presented by Social Security, Medicare and the need for long term care and disability protection.
Using knowledge, we can advance consumers understanding of key issues. And we can elevate the professionalism of individuals working for insurance and financial service organizations, creating value for individuals, families and businesses.
, Ph.D., is president and CEO of The American College, Bryn Mawr, Pa. You can e-mail him at [email protected]
Reproduced from National Underwriter Edition, April 15, 2005. Copyright 2005 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.