A popular trend among financial advisors seeking to get in front of the large segment of affluent pre-retirees is to conduct workshops on how to optimize Social Security benefits.
Other advisors are pitching health insurance advice amid the confusion that has reigned with the rollout of Obamacare.
Whatever the angle, however, advisors typically struggle with converting these prospects into full-fledged financial clients.
“It’s frustrating for advisors seeing all these great people and not being able to get into conversations about finances. People say ‘I’m fine there,’” says Mike Kaselnak, whose Rochester, Minnesota-based 5Q Group coaches advisors on winning over other advisors’ clients.
“People unsatisfied with their current advisor would have left that guy a long time ago,” Kaslenak tells ThinkAdvisor. “People don’t want this bait and switch where they come in about one thing then you talk about another thing.”
Consequently, advisors utilizing one of these loss-leader systems are thought of as the prospect’s “Social Security guy” or “health insurance guy,” and their marketing investment bears little fruit.
But there’s a way — 21 ways, actually — through that impasse, according to Kaselnak.
“Advisors have the right idea: They’re talking about nonfinancial things. But the problem they’re having is bridging that gap into financial things,” he says.
The coach shared two of his strategies for bridging conversations that work.
The first involves powers of attorney. Kaselnak says the advisor should tell prospects attending Social Security or health care workshops that inspecting the legal document will be crucial to determining an optimal strategy.
Kaselnak says very few powers of attorney work with the Social Security Administration. Similarly, they are unlikely to work with the Department of Veterans Affairs or the IRS. “The three major government agencies [that utilize] a power of attorney and guess what — all three have different requirements,” he says.
And while government agencies won’t honor a power of attorney without specific language, many banks and brokerage firms won’t honor a perfectly legal power of attorney that has not been updated within the past year.
“They’ll say, ‘I’m not sure if this is your latest or most current power of attorney; if I honor one that’s not your latest I might get sued,’” Kaselnak says.
So after examining the power of attorney, Kaselnak says the advisor can say: “Just in a brief review of your power of attorney, we see you’re not going to get access to your money when you need it most.”
Regardless of the advisor’s loss-leader program, the advisor now has a bridge back to financial advice.
An advisor pitching health insurance can say that when the client’s spouse is incapacitated, the power of attorney will not be effective to gain access to benefits. Or when the client needs money out of the brokerage account, he’ll need to wait a few months before the court compels the lawsuit-wary firm to release the funds.
“Try to change your cell phone service when it’s not your name on the bill. They’re not going to help you,” Kaselnak says, suggesting it’s not any easier with the government or financial institutions.