Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues. To submit yours, email us here.
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Dear Bev,
I have a client who is struggling with whether or not to retire. He has had a couple of friends contract COVID-19 and knows two other people, through friends of friends, who have died from the virus. He isn’t a religious guy, but he told me this experience has given him soul-searching time and he is wondering if he is making a difference in his work or if he should just quit and, “do something good.”
He isn’t a wealthy man – a total of about $1.5 million in liquid assets and a home paid off worth about $550k. He is only 62-years old and he will be making a big financial mistake to do this. However, I am trapped because his reasoning is somewhat spiritual and deep. He is thinking about his mortality and determining what he wants to do and be in life. But, if he doesn’t find ways to make money and his lives a long time, he could easily run out of funds.
I’m neither a therapist nor a counselor. I do not feel equipped to deal with this and effectively guide him. I have my own biases because I am an investment person and so I look at the financial equation. But I don’t want him going to some life coach who will tell him to follow his heart and then he winds up broke and homeless.
T.D.
Dear T.D.,
How caring of you to be concerned about meeting the varied needs of your client. And yes, one of the things I hear most frequently from my advisor clients is the push-pull between having plenty of money for future goals (the biggest being retirement), but wanting to spend now on the things they care about, be it for altruistic reasons or to enjoy their money while they can. It can sometimes feel like a balancing act to figure out the right juxtaposition between these too. It’s especially hard when a client does not have vast resources. The choices they make matter a lot about how their future will look.
You are right to believe you need to play a life-coach and a financial-expert role. Helping your client to think through really matters and what’s most important to him is a key part of what he has hired you to do. Your client could be reacting to what’s happening and responding without fully considering the impact so you must help think about this from a variety of angles.
This might be a whiteboard session (likely via Zoom or WebEx) to lay out the considerations in making this important decision. Take a consulting viewpoint and help your client answer some important what-if scenario questions, using the following guide:
First outline the different options. There are a few but I would stick with three to four:
- Leave the job now and pursue philanthropic endeavors starting as soon as possible;
- Have an exit plan that is earlier than he originally planned, but not right away;
- Stay with the original retirement plan but find ways to give back long before retirement; or
- Stay the course for now and track how he is feeling and thinking over the next 24-48 months as things evolve and check-in repeatedly to see how things are going.
Lay these out as options for consideration. Then, apply a few decision-making criteria to these options.
- His thoughts and feelings about each of these independent of one another (you must force yourself to be “life coach” during this part of the discussion);
- The give-ups in charting this path over another one;
- The financial implications of each path – taking Social Security at different stages, pension considerations, his ability to give back as much as he wants, other places he could make money for his charitable endeavors;
- Tax considerations;
- Timing considerations (i.e. any impact on the type of work he does, the COVID impact of this decision and so on); and
- Other life considerations.
You are the expert so you might have more to add to this list. But this gives you a good starting place. Having the discussion laid out this way will hopefully allow him – and you – to be more objective and step back to consider which avenues are most appropriate and supportive for him.
Dear Bev,
There is no way we are attending conferences, meeting with clients in person, going to live trainings or having team meetings in our offices in 2020. Nothing I have heard from our senior leaders suggests otherwise. How in the world do we increase AUM in this marketplace?
I.N.
Dear I.N.,
There are loads of ways to sell virtually and be successful at it! In fact, during these times clients and their friends and family members need you more than ever. They may want to make changes to their estate planning, retirement, charitable endeavors, insurance, and much more. These times are forcing people to reconsider what they have in place and what they need. You are the centerpiece for them. The financial advisor should be the go-to to contact for clients about any changes that need to be made.
It’s a great time because clients are also stuck at home or at their vacation house. Call and talk to them about things you are seeing in the market, make suggestions about things they could be considering and ask them who they care about that needs support. Post interesting insights via blog, articles or LinkedIn and share your wisdom and knowledge. Find places to be interviewed or to respond to others who have been interviewed with your ideas about what’s happening and what decisions investors should be considering. Reach out and offer to talk to the next generation who might be laid off and struggling to figure out how best to save until they can be employed again, or others who might be gainfully employed and wanting to take advantage of benefits they are being offered.
The need is vast! You are an educator, planner, financial professional and a guide who can help people navigate through these times. This is not your time to be shy; it’s your time to be visible and show what you can do.
Beverly Flaxington co-founded The Collaborative, a consulting firm devoted to business building for the financial services industry in 1995. The firm also founded and manages the Advisors Sales Academy. She is currently an adjunct professor at Suffolk University teaching undergraduate and graduate students Entrepreneurship and Leading Teams. Beverly is a Certified Professional Behavioral Analyst (CPBA) and Certified Professional Values Analyst (CPVA).
She has spent over 25 years in the investment industry and has been featured in Selling Power Magazine and quoted in hundreds of media outlets, including The Wall Street Journal, MSNBC.com, Investment News and Solutions Magazine for the FPA. She speaks frequently at investment industry conferences and is a speaker for the CFA Institute.
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Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues. To submit yours, email us here. 
