Why take on the role of an educator?

Because it’s key to helping a consumer have a better understanding of why saving, insuring and investing is an opportunity that lightens the burden of daily life, eventual retirement and the possible need to cover the cost of long-term care services.

Before consumers can think seriously about LTC finance, they might need to get the rest of their personal finances under some reasonable level of control.

As we know, financial services change over time and what was right at 30, may require adjustment at 45 or 50. So before you enter the picture, where does the education begin?

Parents play such a pivotal role for their children — important life lessons that are passed on from generation to generation.

My parents didn’t have much money. My mom and dad raised seven kids on $1.90 an hour for more than 20 years. But they had a plan and stuck to a daily budget. Their hard-earned money had to work for them in very creative ways. My siblings and I learned to do the same thing.

I was pleasantly surprised when I saw that a recent 2013 study organized by Genworth found that younger Americans (25 to 39) have a financial plan for their future and are just as likely as other age groups (40 to 50) to have a financial plan.

The finding is particularly insightful given the economic turmoil of the past several years, from the Great Recession to the Fiscal Cliff. The results indicate that younger people have taken heed.

Parents and core family can only do so much and are not specialists with resources to the financial planning options we have today. This is where you become pivotal to clients and prospects leveraging your expertise and subject matter experts (SMEs) you work with.

I recommend a seminar approach.

With busy days and a number of clients to see, it becomes almost impossible to spend as much time as you want one-on-one to share some of your messages with clients and prospects (which includes referrals).

Insurance companies often have highly qualified speakers or educators who will speak to groups of your clients. Larger groups provide the opportunity for more interaction and participation. The number of clients can be from just your book or in combination with fellow advisors that you know and trust. Plus, you are bringing in the SME as a value-add to the client and a partner with you, rather than a competitor.

Here are some ideas for seminar topics:

  • Mortgages. How many of your clients are sitting with a mortgage with an interest rate of five to six percent? With offers still out there today with banks, they may be able to lower the rate to three to four percent. That’s always worth the conversation with clients, and refinancing can free up money needed elsewhere for children’s education or retirement planning.
  • Company retirement plans. Contributions to IRAs and taking the maximum allowable amount directly into their 401(k) account are examples. Age is critical for folks over, say, 50, as some may be eligible to add additional amounts into their 401(k)s. My husband and I have benefited from this and at the same time know that we are taking positive actions in making sure we are taking the right steps to our retirement as business owners.
  • Credit card debt. Every advisor should talk to clients about credit card debt. It may be something as simple as finding out whether clients realize that the debts on some credit cards with an interest rate of 15 percent can be switched over to another card that offers a rate of three percent a year. Clients absolutely need to be educated on credit card debt because it is very expensive debt! The interest rate is so high that the debt is rarely paid down, only the interest.

Recently, some advisors told me that, for some of their clients, they actually find it better to take money out of their stocks to pay off a credit card balance with a 21 percent interest rate. Of course, making sure that clients do not then run up the credit card again all goes back to education on spending and saving — planning for today and the future.

Want to take the survey I mentioned? You and your clients can access the survey here to see how their financial planning habits and confidence compare with those of others.

Next month: More about your role as a financial services educator.

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