Advisors today are being challenged like never before to differentiate themselves from competitors by offering unique value propositions. With technology evolving, client expectations expanding and product offerings looking more alike across firms, it’s increasingly critical for advisors to capitalize on every opportunity to strengthen and deepen relationships with existing clients while adding capabilities that will appeal to new ones.
One such opportunity may be right under advisors’ noses due to significant demographic shifts that are adding years or even decades to clients’ post-career lives — and fundamentally changing the nature of retirement.
According to the U.S. Centers for Disease Control and Prevention, lifespans in the United States generally have been increasing over the long term, with a future life expectancy of 19.4 years for 65-year-olds in 2016, more than two years greater on average than a generation before.
Many of today’s retirees want to use these additional post-career years to find meaning, connect with others and explore ambitions they may have previously deferred. Others may encounter unanticipated medical expenses or need support for social, mental or emotional needs. Without such support, a longer life expectancy can carry significant downsides, including drug and alcohol abuse and higher rates of depression and suicide.
Fortunately, financial advisors are often in the ideal position to help, not only through financial planning that enables clients to maintain a high quality of life in retirement, but by offering longevity planning services and resources that can provide retirees with the support they need to take advantage of new opportunities and cope with unexpected challenges.
Here are some best practices to help advisors incorporate these critical capabilities into their businesses.
1. Address the Longevity Planning Opportunity
An effective suite of longevity planning services should combine bread-and-butter financial advice such as estate planning, retirement income planning and health care/long-term care guidance with services and resources that advisors may not have made available in the past, including, for example, advice on aging in place; connections to volunteering or second-career opportunities; referrals to mental and physical wellness resources; and even guidance on living arrangements.
Expanding an advisor’s longevity planning capabilities does not necessarily mean that the advisor herself needs to become an expert in a raft of new areas of planning, although that may be a good option for those with the appropriate time and bandwidth.