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September 01, 2007 at 04:00 AM
You’ve seen the advertisements.
They show baby boomer couples planning for the “new retirement”– energetic, youthful, purposeful. Retirement advertisements are obviously about much more than money. They acknowledge that boomers seem intent on destroying all the old notions about retirement. They’re poised to break the mold, and create an entirely new stage of life.
And in the ads, who do these boomers rely upon to help create this new retirement life stage? Their financial advisor, of course! When advisors are portrayed, they’re not just investment gurus, but wise friends. Not just financial wizards, but life coaches.
These media messages create expectations in the minds of clients that the financial planning relationship can be more than they might have thought. That it can be holistic, or values-based, or client-centered. But as an advisor, how do you actually pull that off?
Imagine you’re meeting with a client, and the planning conversation turns from their retirement numbers to their retirement life — what approach do you take? While you have plenty of theories, models, tools and techniques for the hard side of financial planning, what about the soft side? Are you left just winging it, based on your own beliefs and experience? Or is there actually a structure, a track that you can follow for helping them plan the non-financial aspects of retirement as well?
John Nelson, co-author with Richard Bolles of What Color Is Your Parachute? For Retirement, thinks that he has the answer. He calls it the Retirement Well-Being Model, and believes that it can revolutionize the retirement planning process for financial advisors and their clients (www.RetirementWellBeing.com).
After almost two decades as a pension consultant, Nelson spent the last four years as a PhD student at the University of Wisconsin, researching and developing the model. Along the way, he investigated the newest thinking from the disciplines you’d expect, like finance. But he also delved into the latest breakthroughs from fields as diverse as psychology and geography.
Nelson poses two important questions and adds his thoughts: “What are the best ways to prepare for the second half of life? How can you plan to optimize it once you get there? Medical researchers, psychologists and sociologists have been researching these questions just as rigorously as economists and financial planners. And what they’ve discovered has profound implications for financial planning. The purpose of the Retirement Well-Being model is to integrate all this knowledge — and all these parts of life — into the planning process.”
Health, Prosperity and HappinessWhen pre-retirees talk about their greatest hopes and fears, Nelson says they typically mention their money and their health — and also how they plan to seek happiness in a new stage of life. These fundamental human goals come together in the definition of well-being, which includes prosperity, health and happiness. He also observed that pre-retirees can increase their chances of getting what they want by actually planning for all three dimensions of well-being, instead of just one. His planning approach integrates all three, and provides a track for advisors and clients to follow.
