Adapting Your Practice to an Aging Client Base

As a financial advisor, your training and experience prepares you to give great financial planning and investment advice, but it may not have prepared you for the unique challenges working with an aging client may bring.

Financial literacy drops by about 1.5 percentage points every year after age 60, occurring uniformly across sex, wealth, education level and stock market experience. 1

With Baby Boomers now turning 70, the percentage of your clients over age 60 may be at its highest point in your career, and likely heading higher.

 

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Adapting Your Practice to an Aging Client Base

Adapting Your Practice to an Aging Client Base

As a financial advisor, your training and experience prepares you to give great financial planning and investment advice, but it may not have prepared you for the unique challenges working with an aging client may bring.

Financial literacy drops by about 1.5 percentage points every year after age 60, occurring uniformly across sex, wealth, education level and stock market experience. 1

With Baby Boomers now turning 70, the percentage of your clients over age 60 may be at its highest point in your career, and likely heading higher.

Key Considerations for the Aging Client

  1. Look for Signs That Your Client is Struggling with Financial Decisions.

You may not be able to make medical evaluations, but if you see indications of a client having difficulty with processing financial concepts or notice a decline in financial management skills, begin a conversation with him or her by asking open-ended questions that help you assess their situation.

Talk to your clients about developing a plan for possible cognitive decline.  The sooner you have that conversation, the more comfortable and productive addressing it later on will be.

One important discussion topic is a Power of Attorney to name someone who can make financial decisions in the event your client is unable to.

Try to meet with family members so everyone is fully aware of your client’s plans.

  1. From Dementia to DeafnessYou May Need to Change How You Communicate.

Whether it’s a loss in hearing or intermittent confusion, you may need to adjust how you communicate with an aging client.  Phone conversations may no longer suffice.  In-person meetings may help them see your non-verbal communication cues, such as body language, voice inflections and facial expressions, which may aid them in processing what you’re communicating verbally.

Think about speaking slower, include graphic representations of your discussion points, be aware of their body language and ask them questions about what you just discussed to confirm they’ve understood.

  1. Be Ready When Family Members Question Your Advice.

Adult children understandably are very protective of their aging parents, so don’t be surprised if they raise questions about the advice you are providing.  If this situation arises, be positive and receptive to their concerns.

Suggest a meeting that includes all interested parties, listen to what they have to say, respond with direct answers and offer to meet again within the next three to six months.

In the course of maintaining and strengthening the relationship you have with your clients, you are in a unique position to take notice of changes in their investing behavior. Awareness of these changes and applying the considerations discussed is key to addressing the needs of your aging clients.

1 http://www.cnbc.com/2016/05/25/the-scary-switch-that-happens-to-investors-over-age-60.html

See referenced disclosure(s) (1) (5) at http://blog.americanportfolios.com/disclosures/ .

About the Contributor

Kimberly A. Branch, CFP®

 

Vice President of Marketing Strategy 
631.439.4600, ext. 217 

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