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New WealthConductor App Lets Advisors Use Health Data in Retirement Planning

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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.”

More of the client’s money will end up going to their children because the advisor projected that they “needed income for 30 years and you only need it for 20,” she said.

Meanwhile, she added, clients who live past 95 are facing the opposite problem.

WealthConductor teamed up with HealthView Services, an institutional data provider, to solve these challenges for advisors.

Standing Out

Health+ provides a new way for advisors to “differentiate” themselves “from literally 85% of the advisors that are out there,” Phil Lubinski, co-founder of WealthConductor, said during a recent webinar, “Introducing Health+.”

O’Connor and Lubinski provided ThinkAdvisor with a demonstration of Health+ just ahead of the launch.

IncomeConductor’s Dynamic Plan Editor already allowed advisors to create customized, written income plans alongside their clients to enable them to see the impact of various assumptions on their plans.

By incorporating institutional health, Social Security and longevity data from HVS, advisors and clients will now be able to see how the clients’ individual health situations and related expenses stand to affect their overall plans and help them to select Social Security claiming strategies to achieve the best income scenarios, according to the firms.

Advantages for Advisors

Asked why HVS decided to partner with WealthConductor on Health+, Ron Mastrogiovanni Sr., CEO and chairman of HVS, told ThinkAdvisor: “When you look at the industry and you look at” many of the software firms providing applications and tools to advisors, many of them “really don’t know the business.”

However, “these guys know the business,” Mastrogiovanni said, noting that Lubinski, a certified financial planner, is a veteran of the advisory industry. “That makes a big difference when you’re looking at how advisors utilize the material and whether they can actually include it in their practice,” he added.

The companies teamed up about a year ago, and HVS agreed to provide WealthConductor with an application programming interface that provides its data to IncomeConductor Health+, Mastrogiovanni said. “They had to do all of the work to integrate the program into their existing system,” he explained.

Health+ offers “several advantages” to advisors over other solutions available now, he added. “A lot of advisors need to license a product like IncomeConductor but then they have to license a Social Security optimization product. Then if they want health care, they have to go out and license that.”

But IncomeConductor Health+ is “all combined so, from an advisor perspective, it’s a lot easier and also less of a burden financially for the advisor,” he explained. Institutions, meanwhile, “would rather have one vendor than three vendors so it actually worked out for them as well.”

(Pictured: Sheryl O’Connor, CEO and co-founder of WealthConductor)