If you need a reminder of Social Security’s importance in retirement income planning, just recall the reaction when the Bipartisan Budget Act of 2015 modified several claiming strategies last fall. It was a field day for the media: Consumer finance and financial advisor publications ran multiple articles on the changes and their potential impact.
The attention is warranted, because Social Security has become a key source of retirement income for many boomers. Its guaranteed, inflation-adjusted lifetime payments make it a valuable asset that would cost of hundreds of thousands of dollars to replicate with commercial annuities. The benefit’s value combined with the program’s claiming complexity, especially for couples, has made Social Security benefits planning a hot topic among advisors.
Consumers want to maximize their benefits and are seeking advisors with Social Security expertise. Not only does that situation create a business development opportunity, but it also raises questions. How can advisors capitalize on that interest and use Social Security planning as a door-opener to bring in prospective clients? And if an advisor goes that route, should she position the service as a potential profit center or as a loss-leader? Here’s how several successful advisors are tapping into the need for Social Security planning.
Blogging for business
Nowadays, advisors can use a wealth of resources to learn about Social Security’s benefits, and analytic software allows for quick comparisons of claiming strategies. That wasn’t the case eight years ago when Jim Saulnier, CFP with Jim Saulnier & Associates in Fort Collins, Colorado, started to study the system. He relied instead on reading source materials from the agency, including its Program Operations Manual System, also known as POMS. (The POMS documentation is now available online at https://secure.ssa.gov/apps10/).
Studying Social Security is a chore, no matter how the information gets delivered. But Saulnier decided to specialize in retirement planning, and he needed the expertise. “We had to do it because my practice was so narrowly focused on retirement,” he says. “All we were attracting, as potential clients, were people who were coming into our office asking us, even back then, about Social Security and how it works.”
As Saulnier and his staff delved into the program, they increasingly recognized the benefit’s value for clients. The planning became much easier with the arrival of specialized software, and the firm was an early adopter of Boston University Professor Laurence Kotlikoff’s “Maximize My Social Security” program.
From a business development perspective, Social Security expertise contributes to Saulnier’s focus on credibility marketing. He realized early on that selling standalone analyses would present a pricing challenge because consumers can choose among numerous free or low-cost online options. Saulnier decided to create a blog, Helpwithmysocialsecurity.com, and provide personalized Social Security plans for $75. The fee includes a one-hour phone consultation, which “helps get the door open” with prospects, he explains.
That price doesn’t cover the blog’s operating costs but nonetheless the consultations have proven to be a worthwhile expenditure. “What we have found is the goodwill that that blog provides is invaluable,” Saulnier emphasizes. “It sets us apart when a potential client comes into our office. They most likely have Googled my name or visited my website. They see the blog, they get to hear me because it’s an audio blog as well as a written blog, and they start to already understand (that) this group of people really know what they’re talking about. That is where the true value has come in.”
Into the classroom
Bob Davis, CFP with Eden Prairie, Minnesota-based Financial Compass also started developing his Social Security expertise before there were many learning options. He earned his CFP certificate but wasn’t satisfied with the program’s coverage of Social Security. When Horsesmouth.com, an educational website for financial advisors, started offering Social Security training programs in 2008, Davis signed up. “Horsesmouth.com had a program they promoted with a presentation and slide presentation and everything to teach Social Security seminars,” he says. “I was already looking for a way to differentiate myself from other financial planners, (and) I saw the site as a tool I could use to be able to differentiate myself and service that area other people were not. So, I became a charter member of their new offering and have been teaching it ever since.”