Yes! In fact at the recent Professional Planners Post Retirement Conference I suggested that financial planners (FP’s) had both an opportunity and responsibility to dig deeper with their clients on understanding ‘retirement’. Typically, clients are seeking clarity about their financial situation. However, in digging deeper, FP’s are likely to discover that their clients haven’t considered the details of life after full-time employment. And herein lies the opportunity.
In 2015 Deloitte released a report – The Advice Based World – and suggested that the financial advisory industry had a bright future. With the shift to a fee-for-service remuneration model, financial planners are at a point where they can position themselves as Advisors – not solely financial planners. What does this mean?
Financial Planner vs Advisor
What is a financial planner?
According to the Australian Security and Investment Commission’s (ASIC) ‘MoneySmart’ website, a financial planner is:
“a person or authorised representative of an organisation, licensed by ASIC, to provide advice on some or all of these areas of your finances: investing, superannuation, retirement planning, estate planning, risk management, insurance and taxation.”
Note the emphasis on finances.
What is an Advisor?
According to the English Oxford Dictionary an advisor is:
“A person who gives advice in a particular field.”
What if financial planners broadened their service offering beyond guiding their clients on money management and creating the nest egg for retirement?
What if financial planners became advisors to their clients? Advisors on preparing for life beyond full-time work, or the job their client may currently be doing. What possibilities would arise both for the advisor and their clients?
Changing the ageing conversation
Most of us will live into our 80’s and beyond. If we ‘retire’ at 65, are we really going to thrive and enjoy 15+ years of leisure? And for those planning an early ‘retirement’ at 55 or 60, that’s potentially 25+ years of … leisure? Really?
As an advisor specialising in ‘retirement transitioning’ or ‘life transitioning’, there’s an opportunity to introduce a range of products and services to challenge the idea of retirement. To not see it as an endpoint but rather as a time to reinvent ourselves. In fact, a planner recently told me that he’d renamed it ‘retyre’: finishing full-time work is an opportunity to change the wheels to ensure many more miles of activity.
If it’s not all about the money, what is a rich life?
We all know that money isn’t everything. For most of us, it’s a means to an end. It provides us with greater choice in our life.
One of the challenges often faced in retirement is relevance deprivation. To age well, and I mean really well, money ain’t enough. Individually, we must all continue to have intangible assets in our lives such as purpose and meaning; social relationships; and, physical exercise.
Because we’re living longer than at any other time in history, there is no model for how we age. In fact it’s our opportunity to innovate ageing. To age differently to our parents, grandparents, or great grandparents.
What does this mean for financial planners seeking to add value to their clients?
- Establish what is important for your clients – dig deep on their fears, uncertainties, and doubts about retiring.
- Explore their hopes and aspirations.
- Coach clients to envisage and then create the next phase of their life. A life that could potentially be greater than they had previously imagined.
From financial planner to advisor
Financial planners are already subjected to changing educational requirements and standards. Particularly since the Financial Adviser Standards and Ethics Authority (FASEA) was established in April, 2017. Introducing a broader range of products and services that extends beyond financial advice requires planners to either:
- Undertake training as a coach, or
- Collaborate with a coach or organisation specialising in life transitions.
Clearly, it’s a commitment and not necessarily suited to all planners.
Fortunately, the shift to fee-for-service, introduced a number of years ago, assists with the transition. Clients are already aware that the days of financial planners earning their money from commissions are gone. Clients know that they pay for each service provided and the financial planning industry has restructured their pricing models accordingly. Consequently, financial planners who broaden their skill set could either:
- Build this into more comprehensive retirement planning products for added value; or
- Create new products and services offered at an additional cost.
3 benefits of being an advisor vs a financial planner
For planners prepared to make the investment and venture down this path, they could potentially deliver:
- Increased client satisfaction;
- Improved client experiences;
And isn’t that what all service-based businesses seek?
However, there’s a third benefit:
- A healthier, happier, ‘retirement’ or next stage for clients aged 55+ who are ready to move on from the job or work they’ve done for most of their lives. And this contributes to changing the conversation about ageing.
Ultimately, a ‘rich’ life, a ‘wealthy’ life, is far greater than accumulated assets or money.
What does this mean for my financial planning business?
Over the next 15 years all baby boomers in Australia will reach the traditional retirement age of 65 years. Consequently, the time is ripe to start having these deeper and challenging conversations with your clients. There are numerous ways in which a planners might start to investigate the possibilities with their clients. This could include one-on-one conversations, small groups, or seminars. However, what’s essential is to ask open-ended questions, be genuinely curious, and unattached to outcomes.
Catherine Rickwood specialises in providing expertise and research-driven consulting on the over 50’s. We deliver knowledge and understanding to create customer-driven strategic change.
If you’d like to discover how Catherine Rickwood can help to broaden your service offering to meet your clients’ changing needs, please contact us.
Dr Rickwood challenged the concept of retirement in her keynote address at the Professional Planner Post Retirement Conference. We’ll be sharing a video shortly with some of the key insights from the presentation. Stay tuned!
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