Do You Have What Baby Boomer Investors Are Looking For?

Reposted with permission from The Trust Advisor. Posted by Joe Murphy, Contributor – on January 30th, 2012

Advisors take note: there are 77.6 million Baby Boomers and another one turns 50 every 8.5 seconds.

Clearly, the number of American investors approaching retirement is on the rise — and this is the biggest opportunity of all time for advisors who know how to meet their needs.

For today, let’s leave the retirees out of the equation. I want to concentrate on the younger cohort of Baby Boomers who still have some time until retirement and are still very much in the accumulation stage of their financial lifecycle.

These people are currently 46 to 55 years old. As they look to transition their portfolios to the distribution phase, many will look for a new advisor. Or, if they elect to stay with their current advisor, they may be looking for an expanded or modified set of services to meet their new needs.

Either way, there are several points to keep in mind:

1. Complexity is the name of the game.

At this stage of life, investors have many commitments and a complex set of circumstances and needs. Over the years, they have amassed more obligations — and more assets. They need higher-powered legal advice. They need more sophisticated accounting expertise. They need a more detailed financial plan.

Serving these clients can reward a team effort. As the lead advisor, you can provide the investment management core of the offering while playing quarterback as part of a larger team that provides services according to its areas of specialty.

It’s essential that you communicate with clients that there is a coordinated plan to help them meet their investment and retirement objectives — with a leader (you) providing direction and oversight and key players providing the vital services and expertise to provide the nuts and bolts.

2. Provide all the key services that can be categorized as “Financial Management 101.”

This involves ensuring the daily cash flow and engaging in the day-to-day planning that enables your Baby Boomer clients to run their lives. They know their lives have gotten more complicated. Simplicity is what they’re really looking to you to provide.

Ask your clients if they would like you to help them with:

* Planning for living expenses for clothing, food and shelter

* Bill paying

* Caring for pre-college children, college-age children, graduated post-college kids who are living back at home

* Insurance requirements

* Accumulating retirement savings

* Wills, trusts and after-life planning

Yes, even high-net-worth clients need to plan and make choices in these areas. Or if they do not need to make choices, they would still like to have the day-to-day irritations off their plate and on yours.

3. Extend your services to cover special situations that you don’t see every day, but that can be pivotal.

Do your prospective and current Baby Boomer clients have special circumstances? Might they do so in the foreseeable future? Now is the time to let them know that you can provide extraordinary service to help them cope with less universal challenges.

You can help them meet the needs of parents who live with them and/or depend on them for some form of financial support.

Many people have special needs dependents, which can be a very costly obligation in terms of money, personal time and commitment. Life planning is vital here, or your clients could spend their life savings in this category and have nothing left for themselves.

Caring for a sick spouse restricts the entire household’s ability to generate income and draws from existing resources. Financing this care is crucial, and when framed in these terms, the conversation goes far beyond any abstract “long-term care planning” bullet point on your brochure.

Divorce and child support can easily complicate any household’s finances.

Many clients in this age group own their own business and it serves as the basis for all — or most — of their net worth. Is the enterprise burdened with debt or other liabilities? Is there a succession plan in place? What happens when your client wants (or needs) to retire?

4. Drill down into the data

Segmenting your business offering into all these areas requires a lot of information at your fingertips.

The risk here is “data exhaust,” a term from the high-tech world where corporate decision-makers breathe too much data and are effectively poisoned.

Your clients want clean, streamlined, purified information about where they are financially.

You need clean information to give them and to ensure that you are always ready to offer them the right service at the right time.

If you’re a Baby Boomer client, would you rather speak to the advisor who sees the whole landscape — with no blind spots, even on assets held by other advisors or custodians — or the advisor who is content to only see what’s obvious to everyone?

The competitive advantage here is clear.

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