What Boomers Need, and Aren't Getting, From Advisors

It’s no secret: A curious thing happened to the self-involved “Me Generation” on the way to retirement: Baby boomers — big-time spenders in their Beatlemania youth and prime time — aren’t saving enough to see them through their golden years.

What’s not well known is that, oddly, the financial services industry is failing to make this whopping cohort of men and women, who control vast amounts of money, a focus of attention. Indeed, boomers are excluded from many financial services corporate efforts, argues Marcia Mantell, founder of Mantell Retirement Consulting (www.mantellretirementconsulting.com) in an interview with ThinkAdvisor.

“The boomers have been forgotten,” says the industry veteran, a former vice president of retirement at Fidelity Investments who has trained FAs for more than 25 years.

Enter: Mantell’s new baby boomer division, zeroing in on retirement planning and income distribution needs of boomers and the oldest Gen Xers.

Offered are custom retirement income planning workshops for advisors and clients, and Mantell is working with the Retirement Income Industry Association (RIIA) in developing curriculum for its Retirement Management Analyst designation, which she holds.

The retirement expert, who founded her education and business development consultancy in 2005, serves large financial services companies and FAs. She is a frequent speaker at consumer and industry events alike, and has presented at Pershing Insite and the RIIA, among others.

Consumer research she recently conducted showed that, while financial services home offices are vigorously marketing to millennials, virtually all firms are giving short shrift to the pressing planning needs of baby boomers, who, to be sure, control far more wealth than the millennials.

Further, neither are financial advisors addressing boomer retirement issues sufficiently, especially the distribution phase, when high health care costs and, typically, high taxes kick in, Mantell contends.

In the interview, she discusses what advisors — particularly younger FAs — can do to make their practices more boomer-accessible.

Mantell — a 57-year-old baby boomer herself — highlights female boomers, who, she says, need to “blaze a retirement trail” by becoming more involved with their money. She is the author of “What’s the Deal with Social Security for Women?” (Rethink Press), due this fall, and “What’s the Deal with Retirement Planning for Women” (People Tested Books, 2015).

ThinkAdvisor recently interviewed Mantell, on the phone from her office in Plymouth, Massachusetts. The first step to retirement planning is becoming more open about discussing money, she stresses. “I want people talking about their money — advisor to client, client to advisor, husband and wife — and how they’re going to make their money last through retirement. For heaven’s sake! Talk about your money!”

Here are highlights of our interview:

THINKADVISOR: Why did you start a baby boomer division?

MARCIA MANTELL: Boomers have the money — not millennials. But from the consumer research I’ve done, no one is talking to boomers except a couple of cosmetics companies, Tide detergent and home health care. Boomers are the forgotten generation; so there’s a huge need.

But isn’t the financial services industry addressing boomers?

I looked at financial services, and it wasn’t pretty: There was [practically] nothing there from the corporate home offices [banks, mutual fund and insurance companies]. It was empty. So we have a problem that’s not being addressed: Financial services isn’t reaching baby boomers.

What are the implications?

Boomers control the vast majority of money — both investable assets and disposable income — yet they’re not ready for retirement financially. Their median savings amount is about  $180,000 to $250,000 [Stanford Center for Longevity and other sources]. Those numbers aren’t big enough.

What demographic cohort are the home offices concentrated on instead of boomers?

The focus has shifted significantly from boomers and even the first Gen-Xers to the kids. Millennials are the shiny new toy. Firms are saying we need to move forward fast with technology to grab those millennials, who finally have more than a nickel.

What needs to be done to reach boomers?

Boomers are going to live a long time. We have to figure out how to stretch their money. Most aren’t even halfway into their retirement years.

But financial advisors are helping boomer clients with retirement-planning needs, aren’t they?

Our entire industry has been focused on accumulation — beating the benchmark. However, the spending side is very different. From what I hear from advisors, they’re not prepared for the conversation they need to have with clients about that. A lot of them are still very focused on: My clients will live off the total return. But it doesn’t work that way.

Please explain.

First of all, boomers think it’s all their money. They see a $1 million nest egg and think they have $1 million. Well, they don’t. A third of it goes to Uncle Sam. That’s a shocker for them. So advisors need to have a tough conversation with boomer clients. And for the most part, I don’t think [FAs] are prepared to have it.

What should they say?