The Right Match

Additionally, only a tiny 1% of respondents now have a geriatric specialist on staff. But more than one in four planners say that they are attending seminars and courses and/or reading articles and books to help them prepare for their clients’ broadening needs–making some effort to become a retirement expert.

Like any other professional, financial planners may find they’ve fallen into a narrowly defined area of expertise in which they’re comfortable. Moving beyond that comfort zone can prove to be exhilarating and give a boost to a practice that’s fallen into a rut.

“It’s important to understand the psychological, physical, emotional, and medical issues that seniors deal with,” says Rosanne Grande, managing director of client services at R.W. Roge & Company, Inc., a Long Island-based planning firm. Grande is a CFP certificant, but has also earned both the CSA designation from the Society of Certified Senior Advisors and the RFG designation from the Institute of Financial Gerontology. “Having a CFP is great, but I needed to know how it worked into Medicare, Medicaid, long-term care, and assisted living issues.”

If you’re not ready to step over that threshold and participate in a formal senior specialist program, then try learning on your own, Cutler suggests. “Learn everything you can about a particular aspect of senior living, or read the annual Medicare booklet explaining the program. There is voluminous material in the public domain to self study,” he adds.

Developing the Tools

More than half the advisors surveyed (57%) are developing tools and resources to assess their clients’ readiness for retirement and to identify key areas where clients will need additional support and guidance. Additionally, some advisors see the wisdom in partnering with third-party professionals such as long-term healthcare specialists or elder care attorneys, but a sizeable 56% have not fostered these external relationships. For those planners who wish to focus more on investment management, building strong partnerships with outside experts can be critical. Relying on third-party expertise may make it easier for advisors to broach “non-financial” topics with their clients–something that many planners struggle with.

Among the most difficult topics to broach with clients, 25% of advisors surveyed pointed to discussions related to health care and long-term care insurance. Funeral planning and memorial services were also tough topics to discuss, according to 20% of survey respondents. Talking about the prospect of having to move in with family members or choosing to live in an independent paid facility later in life was difficult for 18% of advisors, as was discussing how to spend or liquidate clients’ assets after they’re deceased.

Another way to ready your firm for the boomer burst is by making it a family affair. A significant 44% of RIAs surveyed acknowledged that they are building strong relationships with the children of boomer clients. Almost three-quarters (73%) of advisors speak with their clients’ children about their parents living longer. In fact, one in three RIAs proactively initiates longevity discussions with the kids, while a smaller 17% don’t discuss this at all with their clients’ children.

Adding Children to the Discussion

Involving clients’ children in discussions can prove to be a slippery slope, says P.J. DiNuzzo, CIO of DiNuzzo Investment Advisors in Beaver, Pennsylvania. The firm manages a collective $235 million in client assets, with the average client having $750,000 of investable assets.

“There are often conflicting objectives between clients and their children,” DiNuzzo says. Mom and Dad may be in their 70s, the children in their 50s, and behavioral science issues can come into play. “Kids often assume it’s their money eventually anyway.” But children frequently provide their parents with self-serving or poor financial and investment advice, many times due to their lack of knowledge or assuming that what’s worked for their own portfolio will work just as well for their parents’, DiNuzzo adds.

So what do you do when the kids want a hand in their parents’ financial planning because they assume they are the heir apparent? “I’ve never had cause to mention to parents that their kids are giving them bad advice,” DiNuzzo says. “You have to do the right thing for the parents. We have a fiduciary responsibility to the parents, not the kids. And you may not get the children eventually as your clients, but that’s not our concern for now.”

It often pays advisors to remember that while your clients may be responsible for their children, those clients may simultaneously be looking out for the welfare of elderly parents.

Grande says that one of the most important questions she asks her new clients is: “Do you have anyone dependent on you?” As longevity has increased, so has the age of those stuck between the proverbial rock and hard place of caring for an elder. Even very old clients may still need to supplement the income of even older living parents, she notes.

Cutler refers to this as the “senior sandwich” and acknowledges that family aging–not just an individual’s aging–is a real phenomenon.

Maya Ivanova is the research manager for AdvisorBenchmarking, an affiliate of Rydex Investments and a free practice management program designed to help RIAs benchmark, better manage, and grow their firms. She can be reached at [email protected].