Consumers face daunting issues as a result of the inability of lawmakers to fess up to soon-to-be retiring baby boomer demands and needs.
Additionally, at many companies, sales of long-term care products have declined notably over the past 2 years, but the need for supplemental coverage at the client level remains monumental, especially if eligibility requirements for Social Security change, as they will have to, in the years ahead.
Although most “boomers” recognize the term ‘long-term care,’ most have no idea what the product’s features and benefits are, 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 3 issues – the need for Social Security and Medicare reform, lack of customer understanding about LTC, and the profound need for disability insurance – we have incredible opportunities as an industry to educate consumers at every opportunity. At client meetings, presentations at chambers of commerce, and media interviews, we can elevate awareness about the genuine good that insurance and financial products can generate for wealth management and asset protection.
But before we can effectively educate others, we must educate ourselves. We need to better understand the changes that our legislators are proposing and make sure our aging clients understand the impact this will have on their savings and investments. To communicate effectively with the senior market, we must understand the unique challenges and issues confronting mature Americans.
Retirement distributions and estate planning are 2 critical issues seniors will confront. A report released in 2005 by Tiburon Strategic Advisors, a market research and strategy consulting firm, stated, “It is the baby boomers, those born between 1946 and 1964, who will look to liquefy their retirement plans, small- and medium-sized businesses and homes as they reach retirement in the coming years.”
Seventy-seven million baby boomers will start retiring in 3 years’ time. One-half of the baby boomers will retire over a 5-year period, starting in 2009. This will double the number of retirees in America. Today, a baby-boomer turns 50 every 8 seconds. We are not ready as a society.
As the senior population grows along with the financial challenges confronting older adults, there will be a need for a new breed of personal advisor who will assist consumers in preparing for the second half of their lives, including their retirement years.
To be effective, the advisor will need to be well-versed in technical financial knowledge, housing, gerontology, and government programs. Equally important, the advisor will need to be familiar with the sociological and psychological aspects of aging. More than a financial advisor, this person will need to be a trusted counselor.
Effectively serving this senior population will require advisors who understand and counsel their clients on the full range of options open to them during their retirement years. These individuals must focus on serving the whole senior. In addition to learning about financial and medical issues, advisors must have an advanced understanding of the challenges related to aging and the key lifestyle issues affecting 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 professional financial advisors to assist seniors in protecting these assets from inflation, the economy, health issues and housing issues. To meet these challenges, financial service professionals must learn more about what it means to be a senior.