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Financial Planning > Charitable Giving

Helping Boomers To Start Talking About Money

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Often, older baby boomers have a hard time opening up and taking about money, especially their own money and their personal money plans, say several advisors interviewed by National Underwriter.

The trend resonates with research on young seniors done by Financial Freedom, the Irvine, Calif., reverse mortgage firm. In the survey, young seniors, ages 62-75, were asked to identify their favorite topics of discussion among peers. Only 16% identified money and finances–and in 8th place on the top 10 list of preferred topics.

What topics topped the list? Family, children, and grandchildren (55%), followed by health issues (52%) and healthcare and Medicare (36%), says Financial Freedom. Even politics (31%) and religion (21%) ranked ahead of money.

Although the poll sampled people in the silent generation, the generation preceding boomers, as well as older boomers, several advisors say the profile perfectly describes many of their own older boomer clients, age 50+. How advisors can help boomers get past the squeamishness is the topic here.

“Younger boomers, in their 40s, aren’t that way,” allows Mark Heath, a retirement asset advisor with Heath & Associates LLC, Woodland Park, Colo. The younger boomers tend to be bottom-liners who want information, he continues. “If you show them something they don’t know about, they are willing to learn.

“But the older boomers don’t seem to want to talk about money all that much. That’s especially the case with those reaching age 60 and considering retirement.

“They want more relationship, not more information.”

Jay A. Bell sees this all the time.

“Even when older boomers do their financial planning, they often do not focus on it,” says Bell, a financial planner who is also vice president-education at LTC Group LLC, McLean, Va. They like to talk about their grandchildren and their health, he says, affirming the findings in the survey.

However, Bell doesn’t view the family-first discussions as a hindrance to planning. In fact, he says, such personal topics often relate to what the clients mean to do in retirement. Advisors who pick up on it can use the information as a starting point for building a plan around it, he maintains.

“I’m not surprised at all, to hear those survey results,” agrees Jeffrey M. Hochwalt, a registered investment advisor and managing member at Financial Resource Partners, LLC, Greenwood Village, Colo.

That is, it doesn’t surprise him if the boomers are prospects found by way of cold calls or seminars. Such clients give a “very cold shoulder” when discussing their money, he says, citing comments made to him by advisors who have tried it.

Hochwalt won’t even invite such people to his office. He recalls one woman he knows who will talk endlessly about politics and the media. But when the discussion turns to financial matters, she withholds information and is very uncomfortable with being asked questions. “It’s hard to work around that,” he says.

However, when business comes by way of referral, as does his own clientele, “‘money’ flows from being number 8 on the list of preferred topics to number 1 or 2,” Hochwalt says. Referrals want to talk about their money, and they do, he says.

Older boomers do love talking about their grandkids, says Lisa Tatman, a certified financial planner with Financial Management Network, Inc., Mission Viejo, Calif. But that doesn’t necessarily sidetrack the financial discussion.

Many boomers are actively parenting or grandparenting their grandchildren, she explains, or they are helping with education expenses, or creating a legacy that includes the grandchildren. So, it’s easy to move from discussions about family matters to planning for financial matters.

Still, Tatman allows that it can take up to a year to get the full picture. “New boomer clients do hold something back at first,” she says.

For instance, at the first annual review, they might mention some “pocket money” they “forgot” to mention before. This is not small change. It could be 3 certificates of deposit worth $100,000 each, or an annuity or life policy, Tatman says.

“I can’t really argue with their need to build up trust gradually,” she adds. Many boomers have seen or heard reports about advisors hustling annuities or participating in pyramid schemes, she explains, “so they think ‘buyer beware.’” It is after they see that the advisor meets expectations, makes quarterly and annual reviews, and follows through, that they become more comfortable and open, she says.

How can advisors help boomers bring money top of mind for planning purposes?

Listen. Heath says he often does what amounts to a Myers Brigg personality test, mentally sorting out what makes the person tick and get excited.

“I want to engage them in topics that interest them,” he explains. “I want to learn about their lifestyle, what makes them comfortable. I want them to talk…about their goals, preferences, etc.”

Therefore, he does not deter boomers from talking about family or vacations rather than their finances. Instead, he says he uses that discussion as the basis for establishing relationship.

“If they say they like to take vacations, I might ask how many vacations they like to take a year. I might also ask if they want to continue doing this in retirement, and if it is working for them, in terms of what they want from life.

“If they go into more detail, I feel I have the right to bring up the topic of money…say, by asking, ‘How much do your vacations usually cost?’” He may discuss with them whether their current approach to vacations is working for them, giving them a sense of value.

If something is not working, that would be reason to go deeper, he says. Or, Heath may explore whether the clients can afford to handle vacations as they do now on a consistent basis in the retirement years.

Tatman also believes listening is critical. She spends at least 2 meetings getting to know new clients, focusing on what they value and what they want to do. “We do this before we send them to an attorney or other professionals. That’s important if we are to be effective and develop a plan that articulates their goals.”

Many boomers have never even thought about these things, at least not in such a direct way, she points out, adding that “a lot of times, it’s a case of ‘you don’t know what you don’t know.’” So her starting point is values, concepts and ideas.

Take a soft approach. Heath makes a point of not asking blunt questions, such as “How are you going to pay for that?” What works with a lot of older boomers is a “soft” approach, he says. “Help them make the connection between what they want and how they are enabled to do that…

“Start with the feeling questions, and then move to the hard facts.”

Work on a referral basis. Hochwalt has not made cold calls in over 15 years, but says he still brings in over 150 new clients a year. He attributes this to the fact that he focuses on referrals–boomers who arrive already prepared to talk about their money.

Even some referrals have difficulty getting to the point, he allows. But the referral at least provides a basis of trust. In time, most “do come forth with the data, and we do develop a comprehensive financial plan and provide full financial checkups.”

Pre-screen. Hochwalt pre-screens the referrals he gets, too. This helps him rule out seeing people who do not seem open or interested in working on their financials.

Charge fees. That is something Hochwalt is starting to do now. A lot of high-end boomers, especially those in their 40s, have been cautioned to “stay away” from certain types of advisors, including those who don’t charge fees, he says. These boomers believe that advisors who charge fees have “greater credibility,” he says, and they have the expectation that they will pay fees for what the advisor does for them.

This has positive impact, Hochwalt maintains. Not only are these boomers willing to talk about financial matters in detail, they are also “never late for an appointment” and “they call you first before they call their other advisors, when they want someone they trust to put it all together for them.”

Train the advisors. A lot of the time, “no one has trained the advisors to get people to open up about their dreams and aspirations,” Bell maintains.

This is so even though the advisors who are the superstars in the business are the ones who are better at connecting with people, he says. “It’s people skills, not product knowledge, that’s needed–listening, phrasing words, repeating back what the person has said, letting them know you hear them.”

The advisor needs to have rapport with the boomer, Bell stresses. “If you have that, the planning is relatively easy, and you can customize the plan and products to the person’s goals.”

Ask open-ended questions. Bell suggests asking questions like, “Have you thought about what will happen if you get disabled now or 20-30 years from now?” Or, “What would a normal day for you look like in retirement?”

If a boomer says he or she would like to spend more time with the grandkids, nieces and nephews, or more time traveling, Bell suggests opening that up. “Ask the boomer to think about how to do this, and how to set up a budget that will support that goal.”

Delve deeper and help clients focus on what they really want, Bell concludes.

Do this, even if the client says, “I haven’t a clue,” he says. In response, the advisor can say, “Maybe you ought to think about that first.” Also give the client a question sheet, to help them do that thinking.

“If you drill down from the big picture, boomers will often tell you their assets and other details,” he concludes. Advisors who do that will find that many people are really “very clear” about what they want, he says.

Use filters: Tatman believes that her business model includes various “filters” that help screen out prospects who do not want to talk about money matters. Such filters include working with referrals (from CPAs and attorneys), and residents of gated communities (who are typically age 55+, financially set, and strongly motivated to stay where they are, with their community).

Bell tells a story about one younger client who went through the process of identifying goals, disclosing financial details, and working the plan. (The goal was for the husband to retire early, spend time with his children, and teach part-time at a university; for the wife to have funds to achieve her own goals; and for the children’s schooling to be undisturbed.) This entailed financial change, some sacrifice, and further schooling at night for the husband, but all agreed. Today, several years later, the family is living that dream, he says.

The plan needed adjustments along the way, Bell allows, and it required “thinking small” at first and bigger as time went on. But once the couple articulated their goals and wrote the plan, it worked.

“It’s scary in a way,” Bell says. But with good communication and continual tweaking, people can discuss money and develop plans that work.


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