As life expectancy continues to increase, Americans are living longer than ever before, and boomers are steadily moving into retirement. Yet, no matter how much we advance in medical science, exercise daily, and eat right, our bodies still age and some of our physical and cognitive skills deteriorate. This happens to everyone, regardless of how smart or physically fit they were when they were younger.

Our job as advisors is to work closely with seniors and help them stay as financially fit and secure as we can. In addition, we must work within legislation and regulations that most states, including California, put in place to protect the senior population. While these efforts are laudable, no one piece of legislation can solve all the problems. It is up to our own integrity and ingenuity to find ways to help our clients deal with a variety of challenges in retirement income planning.

California producers are required by the state of California to provide disclosure forms when:

  • Potential clients on the sale of an annuity are aged 65 and older
  • Selling a fixed annuity
  • Potential clients on the sale of a life insurance policy are aged 65 and older
  • Assets are being sold to fund a new life insurance policy or annuity

There are other state-specific examples of times when disclosure forms need to be handed out, that include but not limited to such topics as health, privacy, business continuation, Patriot Act, and money laundering.

Bring the family together

While it’s required to provide these forms to potential senior clients, it’s even more critical to explain the forms and ensure that the client has a strong understanding of any actions, products, or services that are recommended. My practice is based on a collaborative, team-based approach where we strive to ensure that clients have financial strategies to last a lifetime and into future generations. In fact, our long-term growth is based on the philosophy of building an intergenerational practice.

At least once a year, we discuss with all our clients, particularly those who are seniors over 60 or the children of seniors, how important it is for the children to be informed about their parents’ assets and wishes. We recommend and encourage parents to inform the children about what their assets are, their sources of income, savings, pension plans, and current insurance policies. While we understand that this can be awkward or uncomfortable for some families, we try to act as a catalyst for opening up this dialogue because it makes planning and organizing later on much easier for everyone.

In California, if an advisor visits the client’s or potential client’s home, it’s required that an invitation of who will be at that visit and the rights that they have to terminate the visit be sent in advance. We have found it much more effective to hold all our client meetings in our office. Clients seem to prefer this environment of professionalism and they appreciate the fact that they can leave at any time they wish. With their permission, we also invite the family members to meet in our conference room, and we prepare the clients in advance for how the meeting will be conducted and what we’ll be covering. In essence, we position ourselves as a resource to answer questions about what they currently have. The parent, mom and/or dad, conduct the meeting to share with the children what their wishes are. This approach makes senior clients feel much more in control and lessens any awkwardness they might have about sharing their financial situation with their children.

We cover many topics and focus on having the family talk about what they want to happen in the event of certain circumstances. For example, what if mom and dad need long term care? What do they want to happen? What are their wishes? If appropriate, we discuss any steps that have been taken so far to achieve their goals. We discuss if they’ve purchased a long term care insurance policy or if they expect to pay for assisted living, in-home assistance, or nursing home care out of current assets. We share where monies are held, how they are managed, and by whom. We review who has been named as beneficiaries to make sure that those decisions continue to be relevant as life situations change. It also helps us to learn more about the family and how each person is affected by the financial situation.

In addition, since our practice is very team oriented we make formal introductions to each member of our internal team and we facilitate introductions with any outside advisors such as accountants or attorneys with whom the client works. This approach is attractive to our clients and they feel real benefits of knowing that they have a team behind them. They begin to understand what the rest of the family’s goals are, and how together we can go forward working in sync.

Another advantage of bringing the family together is that it gives our firm an opportunity to share our expertise with potential new clients. If the parents bring their children to the meeting, we have a chance to become a resource. If the client brings in their parents, it allows us to cultivate the parents as new clients. This is very efficient for our practice as well as for the families and helps keep everyone on the same page.

Make sure clients get the message

While bringing the family together is a key strategy for working successfully with seniors, we also find it helpful to go above and beyond in terms of helping our clients understand the discussions, the product explanations, and the potential outcomes. Often, clients say they understand what you are talking about, but they really don’t. They may think they “get it” or they may be a little embarrassed to admit that they don’t. As mentioned earlier, as people age their cognitive skills deteriorate. They may be pretty sharp, but not as sharp as they used to be.

We work to test their understanding all the way through the process and at each subsequent meeting. It’s as simple as asking a few extra questions including: What do you think will happen if we take this action? What will happen if we do nothing? Tell me what you think we’ll achieve if we do this? Summarize for me how you understand this product (or concept)? If the client has trouble with this, you may need to review the material again or come up with a different way to explain the concept using approved illustrative tools or timelines.

We also provide clients with special notebooks for them to take notes. We encourage them to make the book into a diary of our conversations and we give them “homework” assignments to keep them – and us – on track. One of the homework assignments is to have the client at the next follow-up meeting discuss with the team what we said we were going to do last time and which items they checked off the list as complete. These notes also help us determine how much the client understands and in what areas we need to work on our explanations. We also encourage them to review the disclosure forms with us and ask questions. We may ask them questions to validate whether or not they understand the forms. Again, it’s most helpful when we have the entire family present at the meetings and involved in the process.

It’s especially gratifying to be able to work successfully with our senior clientele and their families. Bringing them all together to help them develop their financial road map over the long term and for generations to come is the foundation of our firm and our vision of how to achieve our own personal long-term success.

Dennis Pettinelli has over 40 years of experience in the financial services business and has built a successful organization which focuses on providing financial education and guidance that help clients make the best financial decisions now and in the future. He can be reached at (650) 595-4600.