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Underestimating the importance of planning

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Let’s start with the good news: Today, older financial consumers tell us having a financial or retirement plan is a priority for them. In a new study we did in conjunction with the Million Dollar Round Table, some 85 percent of boomers and 87 percent of Silent Generation, ages 65 and older, consumers say having a plan was either a priority or a high priority on a five-point scale. In fact, the older the respondent, the greater percent think having a plan is a priority. That is good news.

Now, the bad news
Advisors and agents are not on the same page. In 2009, we asked 600 MDRT advisors and agents to tell us “how much of a priority do you think your clients would say it was to have a financial plan?”

There’s a gap
First, there is a pretty significant gap among Silent Generation consumers. Advisors and agents told us they thought about 65 percent of their Silent Generation clients would say having a plan is a priority. That’s 22 points lower than what consumers said.

For boomers, the gap is the same
Advisors and agents felt 62 percent of their boomer-age clients, ages 45-64 in 2010, would say a plan is a priority. This time, they were off by 23 points.

The implications are clear
Advisors and agents are underestimating the readiness of older consumers to plan for their financial future — a problem you can turn into an opportunity for your firm. Don’t assume your clients or prospects have a plan in place or are not interested in one. It’s a top priority these days. Your inquiry might be welcomed with open arms and wallets.

Focus on confidence
We also asked older consumers in the new study if they think it is important to have a plan and if they are confident in it right now. Once more, we see gaps. Yes, more than nine out of 10 older consumers say it is important to have a financial or retirement plan. But far fewer are confident with that plan. Among Silent Generation, only 78 percent are confident in that plan, and among boomers, only 62 percent are confident. That means about one out of three or four clients out there with plans in place is not very confident in it.

So your polite inquiry about their current plan opens a door for you one out of three or four times. Clients and prospects with plans in place are no longer off limits.

“Do you have a financial or retirement plan in place?” you ask. Then press on with the phrase that pays: “Are you confident in it?”


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