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,
My father is about to celebrate a very big birthday. He retired at 60 and has been retired for 40 years. It makes me realize how very narrow minded we are in our profession about the way we speak about retirement. We talk about time with the grandkids, the second home, traveling, etc. – have the client paint a picture of what they want it to be – and yet it could literally be another lifetime. You think a person works 40 years and we consider this to be a long part of their journey. But then if one lives in retirement for 40 years, this is a whole other journey of a different kind.
I want to incorporate these ideas in speaking with my clients, but it is daunting. I don’t want to freak someone out thinking about the decades of change they will face. But I don’t want to be shortsighted either and act like this is a point in time with no changes or evolutionary experiences.
Are other advisors confronting this issue, and what are they doing?
J.L.
Dear J.L.,
Congratulations to your dad and I hope he has lived a healthy 40 years in retirement! I would like to say how amazing this is but with a grandmother who lived to 99 and a half and who was going out on a regular (twice per week) basis right up until she died, I too understand how short-sighted we can be about what post-working life might look like for people.
I spent some of my career in qualified plans running a 401(k) group. We don’t do enough to think about what post-working life means. We help people save for retirement and to have a life that doesn’t require a regular paycheck (all good things of course) but thinking about what this will be for them, and the many, many different phases one can go through over decades of non-work isn’t usually part of the discussion.
My firm partnered for a time with elder-care experts who shared story after story about how advisors often overlook the emotional toll that comes with aging and having to make hard decisions. Anyone who has had to move grandparents or parents into a medical facility or assisted living when the person moving really didn’t want to go knows this experience. There are many decisions to be made – moving away from long-time friends and family or to a place where your kids or grandkids might be, traveling while still healthy and able to, or finally buying a home or second home (or third) someone long dreamed about. The friend group can change; often people’s friends circulate around their work life and finding new hobbies or volunteer opportunities or classes and so on can be challenging.
There is a lot to enjoy, but there are so many transitions and changes. As you point out, it isn’t enough to solely focus on the financial aspect.
Similar to talking about insurance for one’s family should something happen, advisors want to talk about the many challenges and obstacles faced when entering and living post-work. Insurance is a dangerous subject because most people don’t like to face or talk about their mortality, but living decades in a post-work mode is also somewhat dangerous. You can paint the picture of beaches and cruises and fun with the grandkids but there are many other not-so-fun decisions and choices that have to be made. Having an honest conversation about this with clients, in my opinion, builds trust and shows you as someone willing to be open and honest.
Talk about your father and the experience of watching him navigate for 40 years post-work. You could talk about the celebratory moments but also the challenging ones where he faced some emotional decision or life event. Opening the door from your personal seat, as you’ve done here in the note to me, might be a way to break the ice on the topic and allow the client to talk about their fears and concerns alongside their hopes and dreams.
The more the perspective is raised by advisors like you, the better able the profession will be to address a whole other lifetime of decisions and changes clients will likely face.
Dear Bev,
You wrote last week about the training advisors need to effectively utilize planning software. I struggle with the idea that we, as a profession, aren’t interested enough in the clients we serve to want to ask them every single question about who they are and what they care about. I’ve been doing this for years with clients and I believe I know every deep dark secret they may have wanted to keep. I’ve never shared this with anyone or betrayed their confidence. However, it has helped me to be more effective when they are ready to make a decision.
Recently I had a client – a serial home buyer – who had shared history around bad decisions he made buying at the top of the market in different cities. He came to me recently ready to buy a home on the water in a very expensive city and I could remind him of past decisions like this so we could talk it through together. I can call him out on the decision and while I am supportive, I can also push so he doesn’t make another mistake. I don’t consider this therapy or being his social worker. I am a sounding board who he can trust to have his best interests at heart. In this case he decided to pass on the purchase and called me a week later to say how relieved he felt to have not put himself in a difficult position as he had previously done.
I’m not sure I have a question, just a comment that positioning ourselves as interested and involved doesn’t mean wearing hats we aren’t supposed to wear. I don’t need a psychology degree to see a problem with a client coming when I’ve seen it and lived through it with them before.
N.H.
Dear N.H.,
I appreciate your perspective and agree with your position. Perhaps it is daunting to suggest advisors have to be the therapist or social worker for a client and that they need psychological training (although many successful advisors I know were at one time either in social work or education). I think you focused on an important area, however, which is having a sincere interest in a client’s life and decisions and looking past just the question of what they can afford.
In your scenario, your client likely could have bought the home and you could have helped him to structure the right sort of loan to make it work. Instead, you observed a pattern of behavior and decided to address it with him. You didn’t tell him not to do it, you just pointed out something for him to consider. This is an ideal situation wherein you aren’t telling a client “No,” but you are reflecting on prior discussions and asking him to consider something differently.
This doesn’t work with everyone; some people have big egos or don’t believe it is your place as the advisor to tell them they should reconsider an idea. But if you build a relationship of trust, you should always be able to share your point of view.
I am constantly confronted with the challenge of how to instill genuine curiosity in advisors when they just want to execute and help the client achieve whatever goals have been determined. Getting curious, asking questions, thinking about the “why?” and listening in an active fashion doesn’t come easy to a lot of advisors.
Sometimes advisors are concerned about facing a struggle or bringing up a negative consideration or perspective too. If the client seems happy, why rock the boat? However, to deepen trust, you have to call out the obvious from time to time and be honest about what you see and think. Ultimately this helps both parties reach better decisions.
You have no question, and I have no answer. Clearly your observation and approach is working for you and for your clients.
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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