Overgeneralizations about baby boomers abound in the literature and though many are unsubstantiated, they often seem to ring true in practice. Some of the assumed attitudes and characteristics of boomers suggest areas where agents might want to exercise additional caution in the sales process to avoid potential compliance issues.

Here are some examples:

Boomers are overly optimistic. They seem to overestimate returns and underestimate the risks of investments. This suggests that an agent should exercise care in describing the historical performance of variable products to avoid reinforcing overly optimistic investment expectations. Overly optimistic expectations that are not met can lead to complaints. Agents should always provide details about the potential for a loss of principal and, in general, the potential risks of investing in equities.

Boomers are impatient. They seem to be unwilling to listen and sometimes overestimate their knowledge of financial concepts. Often they want to speed up the sales process. Though they may be impatient with disclosure and education about what they are buying, the agent should take his or her time to provide all the information and cover all of the elements of the sale. Reacting to boomers’ impatience can lead to failure to disclose information properly, which can come back to haunt an agent when complaints arise.

Boomer couples are equals. For many boomers, a husband, wife or significant other is an equal partner in making decisions. Sometimes it isn’t clear who the real decision-maker is. This suggests both partners should be involved in the entire sales process. The agent should obtain information on the assets and liabilities of both partners, provide disclosure to both, and ensure that both understand the product and its features, benefits and costs. Not only does this increase the likelihood of a sale, but it also creates the same expectations in both partners’ minds.

Boomers are quick to complain. It seems many boomers are willing to voice their discontent quickly and forcefully. This suggests that service after the sale is important to head off potential complaints. Being responsive to boomers’ questions and concerns quickly, keeping in touch while resolving their problems, and then following up to ensure that expectations were met is important. It also suggests that the agent document every key aspect of the sales, so that if complaints are made, he or she can respond to them effectively.

Boomers have a wide range of assets. Many boomers have invested in stocks, bonds, real estate, art, vintage autos, etc. Agents should avoid giving advice in areas where they are not licensed. For example, a boomer may ask the agent for his or her opinion on whether to sell a stock and invest the proceeds in an annuity. Unless the agent is a Registered Investment Advisor (RIA) or a Registered Advisor (RA) of a firm which holds a RIA, he or she should avoid giving advice about the purchase and sale of specific investments. Giving advice in an area where the agent is not licensed can come back to haunt the agent if complaints arise from unmet expectations.

Suitability for boomers is not simple. First, it may be hard to estimate the value of boomers’ assets. How liquid is an investment in a time share? What is the level of risk involved in a particular real estate investment trust? These are questions that may bear on the assessment of risk and the agent’s recommendations. Second, it seems that many boomers have significant liabilities that need to be taken into account to understand fully the suitability of a recommendation. It may not be enough to ask for their total assets and base ability to pay on that figure. Boomers’ liabilities may be so significant that they are potentially overextended. This can create a potential problem with their ability to pay for the product. This can lead to lapses, concerns about loss of premium and principal, and complaints about suitability. The agent should dig deep enough for details on assets and liabilities to make a sound recommendation.