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Life Health > Health Insurance > Your Practice

5 ways the silver tsunami is impacting advisors

By Noah Guillaume

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What happens when a baby boomer grows up? They turn into seniors. It’s an inevitable part of aging for any demographic, but boomers are unique in that there are so many of them. How will this so-called silver tsunami impact advisors?

Retirement Advisor’s annual Advisor Survey found that the wave of boomer-turned-senior has had an impact on 73 percent of advisors’ businesses.

When asked to elaborate a little on the details of the impact, the advisors did not disappoint. Continue on to see five ways the silver tsunami is impacting their businesses.

Retirees won't have the income they needClients worry they won’t have the income they need

It’s something we hear and read in the news again and again: Workers not prepared for retirement.

Health education and advances in medical practices are helping us live longer – which is great – but many have not planned for or saved enough for this longevity.

When clients realize their savings are going to come up short, they start looking to take on more risk than they should to try and make up ground, Gary Ruchin of Ruchin Associates LLC says. He advises against clients doing this. “It’s always better to be cautious than risky once the spigot is turned off,” he says.

Clients need to modify their spending, Ruchin says. “It takes a couple of years (for them) to realize that.”

Want out of stock marketClients want out of the stock market

Bull and bear markets can make some people a lot of money, but a lot can be lost when those markets go bust.

“The market has gone down twice in 13 years,” says Jim Cadle of Guaranteed Retirement Solutions LLC. That has made a lot of people scared of the market and turn instead to safer investments.

“Some people are not too keen about 2 percent – 3 percent, but the older people are,” says Mark Steffen of Fortress Financial. Steffen says he is “having great success” with the older crowd opting for security.

“Market cycles go up and down, up and down,” he says. “There’s some money in the market, but there’s got to be some common sense. Put growth into something secure.”

Interested in other productsClients are interested in other products

Trying to get away from the stock market has customers looking at other products.

Guaranteed rate annuities and hybrid life riders are two products Mark Steffen’s clients have been looking at. Gary Ruchin’s clients have shown interest in investment vehicles with lower rates, such as mutual funds. “Nothing too exotic,” Ruchin says.

Jim Cadle’s clients have shown interest in fixed indexed annuities. Though, Cadle notes that for his clients who want the safest of investments, “there are not many alternatives to RIAs and CDs.”

Greater concern with health, life expectancyClients have greater concern with health, life expectancy

According to the 2013 Altarum Institute Survey of Consumer Health Care Opinions survey, only 5 percent of people are confident they will have the recommended amount of savings to cover health care expenses after they retire, and 80 percent are either unsure or unlikely to have enough money for health care in retirement.

Health costs do not get lower as we get older. Some agents in the survey said their businesses have had more Medicare questions and more interest in Medicare supplements, Medicare Advantage and Part D Final Expense.

The Patient Protection and Affordable Care Act is another reason advisors are getting more inquiries from boomers and seniors concerned about paying for their health care. Some employers could start scaling back or cutting retiree health benefits should the law increase costs for them and this has employees very concerned.

Boomers are seniorsBoomers are seniors

It should be noted that while 73 percent of advisors said their businesses have been impacted by the silver tsunami, 27 percent of advisors said their businesses have not been impacted. After all, what is the difference between a boomer and a senior?

It’s not so easy to tell these days since we’re living longer and retiring later. For many financial advisors, there really is no distinction between the two demographics – or any demographic.

Regardless of age, most everyone would like to retire someday while maintaining a comfortable lifestyle. From the advisor perspective, this could be anyone from age 18 to 100. When the objective is always the same, some advisors regard their clients all the same.

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