Want to Retain More Clients? Provide a Different Kind of Retirement Advice

Last week, an employee who was a year out from retirement called the Financial Finesse Financial Helpline seeking some guidance. He didn’t ask our planner about payout options in his 401(k), or how to file for Social Security. Instead, the employee explained that he didn’t really want to retire even though he could. He knew that when he did, he’d be losing the only social interactions he really had.  The people he’d been working with over the course of many years had become his friends, and leaving the company would mean losing the thing that had even more value to him than being able to retire comfortably.

Our caller’s concern about losing something in retirement that brought him emotional fulfillment is not a surprise.  In fact, that’s why there have been countless (and even more since the Great Recession) retirement coaching firms popping up all over. They focus on clients’ core values, and prepare people for more than just the financial aspects of retirement.  But there’s a need and a benefit for advisors to consider these values and provide more holistic retirement advice when dealing with their own clients’ retirement planning.

There are mixed views on whether providing holistic retirement planning advice is worth an advisor’s time and resources.  The volatility of our economy and new legislation dictating more responsibility for advisors in managing clients’ assets are giving those who believe it’s not worth it a shove in the other direction.  Soon, clients will seek out advisors based not only on their investment returns and performance, but also on how much guidance they provide their clients on the intangible values in retirement.  According to the Dow Jones Affluent Investor Study, two-thirds of study participants reported having created a retirement plan with their advisors. With a more well-rounded approach to retirement planning, advisors have the opportunity to capture the other one-third.  By getting on board with the new paradigm, advisors may have an upper hand on the competition.  They’ll be offering what investors currently want and will eventually come to expect: retirement planning guidance that focuses on their overall picture and life goals. Because of this, these advisors will continue to attract and retain more clients while increasing their clients’ satisfaction in retirement.

The biggest issue right now for advisors is being able to retain clients.  With the recent market correction and Federal credit downgrade, holding onto investors after they’ve seen daunting losses in their portfolios can be time consuming and stressful, especially if they aren’t educated about market fluctuations and don’t understand their long-term goals.  According to Prince & Associates, Inc. (as cited by NABCAP), after the recession hit, over 80% of investors planned to move their money away from their advisor.  Traditionally, the industry has focused heavily on an advisor’s performance and investment returns to attract clients, showing potential clients their money is going to be in good hands. But there is opportunity and a benefit for adaptable advisors who will focus on a broader realm of factors that affect people in retirement such as our caller’s and others that hold emotional value.