Advisors have a hard time breaking through boomers’ resistance to plan ahead

By Linda Koco

When presenting products or discussing planning needs and goals with baby boomers, many advisors say they run smack into the “not in my backyard” mindset of many boomers.

National Underwriter has run countless articles about this phenomenon in the past few years.

It seems that many boomers, especially older boomers now in their 50s, present themselves as charming, confident and mostly carefree, where their financial future is concerned.

Sure, they may be struggling to pay the mortgage and the kids’ college tuition. But they still have this self-sufficient air about them. As in: “Insurance? Who needs it, other than car, the house and health insurance? I’m all set.”

Some advisors do try, often repeatedly, to nudge boomers to get off the dime and assess what might happen if things take a turn for the worse in the future. But frequently that nudge is not enough to cause the boomer to budge. If blessed with health and perhaps even some wealth, they act as if they are charmed–i.e., that serious illness, disaster and misfortune will just keep passing them by, as always.

Of course, seasoned advisors know that is nonsense. They know, “it hasn’t happened to you–yet.”

But how does the advisor get through? That is, how to bring boomers to understand–factually and without scare tactics–that the day may really come when they will: 1) need to start living on the assets built up (hopefully) over several decades; 2) suffer some debilitating injury or illness; 3) see opportunities for continued employment dwindle; 4) witness erosion in employer-provided retiree benefits; and/or 5) lose reliance on the ability of government and public benefits programs to impact financial stability significantly.

Beyond that, how does the advisor bring that understanding around to the other important point: that certain private-sector insurance and financial service solutions, though seemingly irrelevant in view of the boomers’ near-perfect lives, should be evaluated now, while life is still good.

I’ve been asking around about this and have received lots of answers. But only one piece of advice is a clear winner: “Wait for the boomer to see the unthinkable happen to a loved one.”

It appears that nothing drives boomers to a financial advisor faster than when a parent enters long term care, a brother has a business go under, a dear friend retires with insufficient funds, or a neighbor suffers foreclosure on his or her house.

Apparently, these events cause boomers to take better care not only of their physical health (exercise more, stop smoking, etc.) but also of their financial health (investigate income planning, buy insurance, set up an annuity, arrange a trust, etc.).

One advisor tells of how one boomer client suddenly came to the planning table, eager to feast on the concepts and products laid out there, after his partner got laid up from an auto accident. Seeing the partner’s leg hanging in traction at the hospital, and hearing the partner’s worries about caring for the family, was enough to spur the client to hotfoot it over to his financial advisor for a long chat.

Yes, there is a touch of narcissism in this–i.e., “That happened to him. But what about me-me-me?” (Boomers aren’t called the Me Generation for nothing.)

But simple human nature is very much in play, too. When confronted with the sights and sounds of personal struggle, most of us do respond self-protectively as well as with compassion for others.

We want to be sure that “that” doesn’t happen to our families, ourselves and our monies. Jolted by the suffering of a loved one, we search for the safe place, the most reasonable source of security.

This is where insurance and the insurance advisor have a critical role to play. Knowing that boomers may be charming but that no one’s life is really charmed, professional advisors can thoughtfully and expertly direct these clients toward financial solutions that build security for the long term.

Most people will agree, intellectually at least, that hard times will come sometime in their lives. Most will also agree that they would likely fare better if they were to plan ahead “for the day when.” The next step is the advisor’s job: to demonstrate how insurance and other financial services have solutions that can help execute that plan.

It appears that nothing drives boomers to a financial advisor faster than when a parent enters long term care, a brother has a business go under, a dear friend retires with insufficient funds, or a neighbor suffers foreclosure on his or her house.”