What You Need to Know
- With data provider HealthView Services, the firm has launched a new tool called IncomeConductor Health+.
- Most advisors are uncomfortable talking to clients about health care costs, WealthConductor CEO Sheryl O'Connor says.
- Health+ will enable advisors to use data like actuarial longevity projections, Social Security claiming options and health care expense projections in client plans.
The fintech firm WealthConductor has teamed up with HealthView Services to help advisors integrate personalized health data into their clients’ plans, the companies said Tuesday.
The firm’s IncomeConductor retirement income planning software now integrates HVS data through a new application called IncomeConductor Health+.
The tool gives lets advisors use personalized actuarial longevity projections, Social Security claiming options and health care expense projections, including Medicare premiums and out-of-pocket costs, in client plans, the companies said.
“We’re always looking for ways to better serve individuals through advisors and give them a better retirement experience,” Sheryl O’Connor, CEO and co-founder of WealthConductor, told ThinkAdvisor.
Unlike retirees of the past, retirees today typically “don’t have pensions to rely on,” she noted.
The “main concerns” among retirees, “they keep telling us, are they want a written plan because they want to make sure that they’re not going to outlive their savings” and, “even more so after COVID, health care expenses,” she said.
“We know that health care expenses are the major reason for the rising rates of senior bankruptcies, which are alarming,” she said. “And it’s just getting worse with the COVID wave and the long-haul COVID.”
Retirees also grapple with “financial uncertainty,” she said, noting a lot of people left their jobs or decided to retire early because “they were afraid to go back into a traditional office environment” in a pandemic.
According to one of Income Conductor’s clients: “We redefine the concept of ROI for our clients to mean ‘reliability of income,’” said Andree Mohr, chief implementation officer of Integrated Partners, an RIA affilated with LPL Financial. ”With Income Conductor, we can illustrate how to position their assets to produce reliable income throughout their retirement years. [It] is the best software available to illustrate those key elements of our planning process.”
The Cost of Avoiding Uncomfortable Questions
Financial planning, of course, encompasses many elements — some of which are outside of advisors’ main areas of expertise. O’Connor pointed to a recent survey that she said indicated “less than 14% of advisors feel comfortable even talking about health care and expenses around it with their clients.”
That’s a “huge red flag there” because health care expenses are one of the top two concerns of clients, she said.
Part of the challenge for an advisor, she explained: “One of the first things you have to talk about when you’re creating an income plan is how long is this plan going to last? How long will you need income, which is essentially translating into when do you think you’re going to die?”
To avoid discussing that issue, advisors often will just assume in their plan for each client that he or she will live to 95, she noted, adding many advisors also don’t know how much health care costs each client.
From the client’s perspective, she said, “if you’ve got chronic conditions and you’re going to have a lower lifespan, then what that advisor is doing is they’re shortchanging you money that you need to pay for that health care expense that is higher but also money that you could be using to have a much fuller and richer retirement before you die.”