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Retirement Planning > Saving for Retirement

The boomer expert: How to connect with boomer clients

By Andy Stonehouse

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As the first of nearly 76 million baby boomers reached Social Security age last year, it began to dawn on many advisors that their work in financial planning was gradually going to require a whole new focus. In the coming decades, those retiring boomers will present great challenges–and provide excellent opportunities–for advisors hoping to deal with the impact of the boomers’ notoriously devil-may-care attitude toward saving and long-term planning. This month, we speak with Barbara Walker, an expert on dealing with boomer client?le, as well as offering a special section (starting on page 48) visualizing many of the differences between boomer-age retirees and more traditional seniors, members of the older, pre-war Silent Generation.

Los Angeles-based advisor Barbara Walker, a boomer herself, has found that specializing in serving the needs of boomer-aged retirees and pre-retirees has turned into a thriving business. SMA managing editor Andy Stonehouse spoke with Walker about the differences between reaching the older generation of seniors and a newer, more independent (and more financially embattled) generation of boomers.

SMA: How did you get your start, and at what point did you begin to focus on the boomer market?

Walker: I began my career in the early 1990s. I had a master’s degree in business management and specialized in corporate taxation and investment; I worked in the corporate arena and I traveled a lot. But I was also married with two young kids and I thought it was important to pass a value system along to my kids, but hard to do when I was gone so much.

In 1998, I opened my own small business, a children’s daycare center in Altadena, and I ran that for 10 years. I maintained a select few financial clients but for the most part, I was the director of my center. That’s where I first started noticing boomer parents and their behavior. There was so much lack of knowledge about their own finances. It was really astounding how much information was missing from their financial lives.

In 2005, I started work as a personal financial planner, with a focus on boomers. I set out to empower them with knowledge and educate boomers to allow them to have a successful retirement. That was based a lot on what I saw out there … a lot of people caught in the sandwich generation, taking care of their children and their parents at the same time. It was heart-wrenching.

And yes, I am a boomer myself. We were definitely not a generation of savers. We seem to have focused on the wrong things, and then you wake up one day and you say, “Wow, I forgot to plan at all.” That light bulb never came on and many people have found that their retirement plans have fallen through the cracks.

SMA: What strategies have you found work best with boomer clients?

Walker: I started doing workshops specifically geared for 55 to 65 year olds. It’s a chance to show them my knowledge base, and get them to come in and work with me. I try to change the focus so it’s not totally on accumulation of wealth but more about preservation and distribution during retirement and the efficient transfer of those assets to their kids. I also absolutely insist on a family meeting at some point during my sales process. Hopefully that way we can all start building a generational cycle of financial knowledge within the family structure.

I do a lot of pro-bono work for churches, even for the corporate sector, where I bring this kind of education, at no charge, to the community. I’ve worked for Disney here in Southern California … I go down there monthly and I do different workshops. I let people know about the benefits of being physically fit, of having their 401(k) in order and having total financial literacy. I’m also the president of the Culver City chapter of the Society for Financial Awareness, a nonprofit group which provides financial education in the community.

My business stretches all over Los Angeles, into Orange County and Riverside, and I also have clients in Atlanta, where many of my local clients’ families live. Referrals are very important to me, and the number of referrals I get I think is mostly due to the personal, no-pressure approach I use.

SMA: What are the primary challenges facing boomer clients?

Walker: The biggest issue is that so many people turn 50 and realize they haven’t adequately saved for retirement, at all. The second issue is that many of these boomers also find that they are caring for both their own kids and their parents, at the same time. So it’s important to get them to understand the challenges of the retirement and financial planning issue and that certain things need to be in place before they retire.

They’re also more concerned than ever. I have lots of clients who had substantial losses in their retirement savings, not just since the fall of 2008. There are those who’ve lost their jobs or have lost their 401(k) accounts, and they’re scared. They’re saying things like, “It’s too late and there’s no hope for me.” I sit down and we go over their goals and try to find solutions, and when we do that, I find that they’re not as desperate anymore.

SMA: What are some of the major differences between older-generation seniors (the “Silent Generation”) and new, boomer retirees?

Walker: Older clients were fortunate enough to have pensions–and some of my boomer clients do–but pensions are largely a thing of the past. Consequently, many boomers find themselves in a desperate situation. And even the older retirees keep scrambling to reposition themselves to make up their losses. The good news is that with proper planning, things can be adjusted, at any age.

With boomers, you definitely find that they’re a lot more inclined to want to have some kind of control over their money and their financial planning. They have access to tons of information and they are frequent Internet users. But depending on your style, if you work with them, they will slowly release that tight control and become a partner with you in the process.

The “Silent Generation” seniors are looking for guidance. They are less savvy than the boomers, for the most part, and want to feel secure that the person they are working with has their best interest at heart. They are, however, less inclined to use the Internet to get information and are therefore less challenging to work with.

There’s such a large number of boomers retiring and that really means a tidal wave of change for all of us. The biggest challenge is all that anxiety they feel as they begin to transition into retirement. Boomers get all antsy–I sometimes feel like my role is more like a psychiatrist–and that affects their decision-making process. You’ll find people who’ve retired and then they just can’t stand it. Suddenly they want to pull their money out of a safe vehicle and try to go into business for themselves– invest in a franchise or something that’s totally out of character. People still want to feel viable after they retire.

SMA: What types of products do you emphasize with your boomer clients?

Walker: I sell a mix of annuities, life insurance and LTCI. To date, the split is about 80 percent annuities, 10 percent life and 10 percent LTCI. Recently though, I’ve been making a push for more diversity in my clients’ portfolio with a mixture of secure-type products along with some managed money. The younger boomers tend to have a higher tolerance for managed money and, for the right clients, I am finding this mixture to work well. As an Investment Advisor Representative, I am able to offer a wider range of investment vehicles. I have one client that historically invested only in CDs and was finding that her money was not going as far as it used to. With a mixture of an annuity with a lifetime income benefit rider and a carefully selected amount of funds in a managed account, this client began to see her situation improve. We also made provisions for a catastrophic illness and added a long term care policy to insure that her assets were protected against any unexpected illness. While not compromising her cash position, I think we really maximized on her assets and instituted a hedge against inflation.

That’s what I do with all of my clients. We identify the amount of their money that absolutely can’t be lost under any circumstance, and we put that into conservative investments, but I also try to use some more aggressive plans to maximize on the stock market. Here in California, because of the severity of the recent financial crisis, I’ve found that it immediately created an awareness of financial issues among boomers, and that’s actually turned out to be more positive than I expected.

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