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Life Health > Running Your Business > Selling

How One Simple Tactic Can Help You Connect

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What You Need to Know

  • Consumers are more worried about health care costs.
  • They’re more worried about the overall cost of living.
  • Many wish they had a professional who could talk to them about what worries them.

There are many good reasons why financial professionals love their jobs. The opportunity to decipher the complexities of financial markets, the wide variety of tasks necessary to develop comprehensive client portfolios, and putting years of hard work and study into practice are just a few examples.

But it really all comes back to the satisfaction of helping clients achieve their financial goals.

So it may come as a surprise that one of the greatest skills a financial professional can demonstrate isn’t something technical or specialized in nature: It’s the simple act of listening.

The Turmoil

Data from the recent Retirement Risk Readiness Study from the company I work for, Allianz Life Insurance Company of North America, suggests this skill is more important than ever.

The participants were 1,000 U.S. individuals, ages 25 and older, with a significant amount of household income or investable assets.

Due in no small part to the chaos caused by the pandemic, people are more worried than ever about a number of risks to their retirement security. Respondents to the survey reported increased worry in 2021 about a wide variety of concerns including health care costs (71% versus 65% in 2020), the rising cost of living (67% vs. 59% in 2020), the impact of a market downturn on retirement savings (66% vs. 54% in 2020) and running out of money before they die (59% vs 56% in 2020).

This heightened anxiety about various financial planning topics is not exactly surprising given the turmoil of the past year. The eye-opening part of the story is the fact that, despite the rise in worry, clients aren’t sharing these concerns with their financial professionals.

The Holes

Among respondents who currently work with a financial professional, approximately two-thirds indicated they are not currently discussing these topics. However, there is a silver lining to this concerning trend – the majority of respondents said they would welcome conversations on how to mitigate these worries.

The issues people are most interested in getting professional guidance on include: running out of money before they die (66%), the impact of a market downturn’s on savings (64%) and being too conservative in investments and missing out on market gains (63%). In addition, more than half said they would like to discuss concerns about high healthcare costs (59%), the rising cost of living (58%) and lack of funds to do all they things they want to do in retirement (57%).

That’s why the simple act of listening is so important.

Too often, financial professionals are in a hurry to offer solutions when they might not understand the full extent of the problem. Having open and honest conversations on a regular basis may be all that’s necessary to ensure you’re getting the full picture and responding to the key issues that are causing your clients the most concern.

Although it’s easy to dismiss these insights and believe “that’s not me — my clients tell me everything,” it’s far easier to make sure you are having these conversations so you can feel one hundred percent confident that all of your client’s bases are covered. Your clients might not be giving you complete story about what’s keeping them up at night, but without specifically asking, you’ll never know for certain.

The Recently Retired

In addition to highlighting this reluctance to discuss retirement concerns, the study also found a compelling difference in confidence among retired Americans.

Although retired respondents reported less anxiety about various risks to their retirement, the study identified a distinct difference between those who are recently retired (less than 10 years into retirement) and retirement veterans (10 or more years in retirement) in terms of both their level of worry as well as their willingness to get professional help.

Recently retired respondents reported feeling significantly more concerned about the majority of retirement risks when compared with those who have spent more time in retirement, including healthcare costs being too high (64% vs. 40%), the rising cost of living (54% vs. 27%), the impact of a market downturn on retirement savings (61% vs, 39%) and running out of money before they die (46% vs. 24%).

One bright spot is that recently retired Americans are more willing to discuss these topics with their financial professional. For those that reported interest in discussing retirement risks, the most popular topics were the impact of a market downturn on retirement savings (54%), running out of money before they die (37%) and the rising cost of living (34%).

The Power of Protection

Along with revealing specifics about your client’s biggest worries, these conversations may also highlight what measures they’d prefer to help them feel more secure. Amidst all of the worry, the study found  a clear preference for protection products. When asked whether they would rather have financial products that have the potential for big gains, but also potential for big losses or products that protect from big losses, but come with smaller gains, nearly seven in 10 (68%) said they would prefer the protection product.

Although protection might not always be top of mind when meeting with clients, it seems that many Americans are more interested in safeguarding what they have than growing their assets. It’s important for financial professionals to keep this is mind as they fulfill their dual mandate of between protecting clients’ assets from risk while ensuring they’re able to generate enough income to last through retirement.

It’s no secret that Americans are uncomfortable discussing financial topics, but it’s troubling that this reluctance extends to conversations with their own financial professionals. If they don’t feel comfortable addressing these concerns with the very people who are there to help plan for the future, it’s unlikely they’ll take any action to address the various risks that could jeopardize their retirement. A more proactive approach to discussing retirement risks can make a big difference in your relationship with your clients, and enhance the overall value you deliver.

Kelly LaVigneKelly LaVigne is vice president of consumer insights at Allianz Life Insurance Company of North America.


(Image: Shutterstock)


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