Retirement: It’s On! Guiding clients through life-changing events

Guiding clients into retirement takes more than just a budget and a balance sheet. It requires finesse on the part of the advisor to keep money matters in focus while addressing the emotional issues clients commonly face as they prepare for or enter the next phase of their lives.

Three advisors discuss their thoughts on issues that can influence retirement plans.

Loss of Life Partner

As we age, the financial impact of death becomes front and center in our financial planning efforts. Not only are we faced with the implications that our own demise has on our loved ones, we also are forced to consider how the loss of significant others, such a spouse, domestic partner, or business partners, may affect our lives.

These life events often entail emotions that are difficult to process, yet at the same time, critical financial decisions must be considered – and financial experts adamantly recommend keeping feelings out of the latter.

It’s time to rise to the challenge when you, as an advisor, sit across the table from your longstanding client who just buried his or her spouse to discuss previously established plans.

“Put very simply, we hold their hand through the initial period of transition, and well beyond,” explains Rick Kent, CEO and founder of Merit Financial Advisors based in Alpharetta, Georgia. “We have spent a great deal of time and effort developing processes for managing not only the financial implications of significant life transition, but also the mental hardships that can accompany such periods in one’s life.”

Succession Planning

For years, the client worked long hours and made sacrifices along the way to build a family business to pass on to the next generation. Now, the time has come to retire and step away from day-to-day operations.

Easier said than done. This can be a formidable task – especially when the client attempts to make the transition carrying the weight of the future success of the business on themselves. It’s even more challenging if they fear their hard-earned gains and the company’s standing in the marketplace will be squandered.

Here is where straightforward communication facilitated by a financial advisor comes into play.

Sam Brown“In our succession planning work with independent business owners, one of the biggest issues we run into is a lack of communication with younger generations,” notes Sam Brownell, managing director at Stratus Wealth Advisors, LLC, in Kensington, Maryland. “This lack of communication leads to a lack of trust between generations and therefore important issues, such as inventory management and capital raising, are often not effectively taught to future leaders.”

Add this deficiency to preconceived notions the older generation has regarding the younger generation (and vice versa) regarding the strengths and weaknesses of each and transition planners often find they are dealing with a hornet’s nest rather than the productive beehive the stakeholders think the company is operating as.

“The best starting point is to sit down with the key stakeholders to have an open and honest conversation about everyone’s goals,” said Brownell.

Potentially, doing so may seem more like the work of a negotiator and or psychiatrist. But as any financial advisor whose advice merits their fee knows, a healthy dose of counseling goes along with financial planning.

“We find that opening these lines of communication can help the older generation have more confidence that the younger generation is committed to upholding the company’s values – and it can help the younger generation have more confidence that the older generation is actually planning to transition ownership,” said Brownell.

Conventional Wisdom Not Applicable

It’s only natural to seek advice from family and friends when facing a major life transition like retirement – especially when they have seemed to successfully navigate that same challenge.

For instance, if a client says, “strategy X worked for my sister,” or “for my golfing buddy,” they stand the chance of falling into the pitfall of thinking the same strategy should work for them.

Why wouldn’t it? Right?

Wrong. Possibly very, very wrong.

Travis MausSo says Travis Maus, managing partner of the S.E.E.D. Planning Group, LLC, which has three New York State locations in Binghamton, North Syracuse, and Whitney Point as well as in Tampa, Florida, and Knoxville, Tennessee.

The “over-reliance on conventional wisdom” as Maus describes it is one of the biggest obstacles he sees clients face when approaching retirement.

“Every client has special circumstances and deserves advice specific to their personal situation, yet so many rely on advice from friends, entertainers, non-specialized financial professionals, or internet posts and articles,” he said. “If all clients have unique priorities, goals, and financial resources, then their advice and planning need to match that.”

The Journey

Over the years, as an advisor, you’ve developed a relationship with your clients; you’ve celebrated their triumphs such as job promotions, new home purchases, and the birth of grandchildren. You’ve also buoyed them during life’s turbulent seas. Connecting with them in a empathetic manner while navigating through the financial impact of the death of a loved one is already built into the DNA of your relationship. Encouraging and supporting clients as they turn over the reins of their life’s work and steering them away from advice that isn’t in their best individual interest is what you have been preparing for during the years this client spent with you in the accumulation phase of financial planning.

You’re both ready to transition to the client’s retirement.


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