November marks the start of the chilly season for many of us — a time when we rake up autumn leaves and tidy up our homes in preparation for the colder, darker days ahead.
It’s also Long Term Care Awareness Month which is a great reminder to roll up your sleeves and assess whether or not your clients’ financial plans need some straightening up of their own. Here are my tips:
Check back in.
If there’s one thing that seasonal transitions reinforce, it’s that the only thing that stays the same is change. Just when we get comfortable in a job, a relationship, a location, we are inevitably faced with new challenges that alter our situation and perhaps even shift our outlook.
These changes can significantly impact your clients’ bottom lines and lifestyles now and in the future, so it’s important to check in with them at least once a year to help ensure their plan is still working for their needs.
A new Genworth Financial study, The Future of Retirement Income, reveals that while just 4 percent of pre-retirement respondents expect to retire earlier than their target age, an astounding 46 percent of actual retirees did so; a majority of those cited loss of a job — not achieved goals — as the reason for their adjusted retirement.
As if that’s not troubling enough for your clients’ long term goals, the same study also turns a common misconception on its head: 64 percent of retirees say they face increased expenses due to rising costs of health care, cost of living and long term care to name a few.
You and your clients can mitigate these common outcomes by checking back in annually to determine if their current allocations, responsibilities and expectations have changed. If no major changes have occurred, your clients can rest easier knowing that they’re on the right track. If something significant has happened in their lives, now is the time to make necessary amendments to their existing plan to point them in the right direction again.
Put it in writing.
I’m a big believer in committing our goals to writing. Even if you’re actively managing their money for them, use this annual ‘checking in time’ to help ensure that every client has an updated copy of their financial plan — whether or not changes are made to it.
Written plans force your clients to identify their goals clearly and concisely so that both you and they can chart an easy-to-follow path on paper (or on a PDF or in the cloud). When short term desires arise throughout the year, they can check their plan to see if they align with their long term intentions.
Above all, fall is also a great time of year to pat your clients — and yourself — on the back when key benchmarks are reached. Whether it’s over a mug of hot apple cider or just on the phone, this reinforces your clients’ conviction to their goals and puts you solidly on the team of experts they leverage to reach them.
Practice what you preach.
Last but not least, no plan or advice will ever be heeded if we don’t practice what we preach. I was recently giving a presentation to about 60 financial advisors and asked who among them had drawn up their own written financial plan. Out of the entire group, just nine advisors raised their hands. I then asked who had a documented financial plan for their businesses’ succession… in other words, who would take over their business or clients once they were no longer willing or able to do so. Not a single hand was raised.
As an Olympian and lifelong fitness advocate, I often equate financial advisors to coaches and trainers. If you were choosing a fitness trainer to help you lose weight, bounce back from surgery or compete in the Iron Man, you would choose someone who has been there in the trenches and knows what it takes to succeed. We all need insight and motivation from others to achieve our own goals.
Financial advisors are no different! Clients choose — and retain — their advisors based on the level of trust they develop with them. If they feel you speak from first-hand experience, they are that much more likely to stay with you.
Start by drawing up your own plan if you haven’t done so already and share some insight along the way with your clients.
When life throws you curveballs, adjust as necessary and stick to it for the long haul just as you recommend your clients do.
By doing this one thing for yourself, you’ll gain an appreciation for your clients that not all advisors have; you’ll also become more effective in addressing their needs.
Until next time, seize these autumn days!