Top 4 Tips to Working Successfully with Retirement-Age Investors
BY John Easton, Director of Wealth Management
June 14, 2017
2015 marked a demographic milestone: for the first time ever, there were more people in Canada aged 65-plus than there were under age 15. By 2036, one in four Canadians could be 65 or older.
With such a huge segment getting ready to capitalize on their lifetime financial plans, advisors face unprecedented challenges. Many financial advisors have clients growing into this segment—or they plan to specialize in this client base. But they don’t necessarily know best practices.
Working with senior clients has its unique challenges—on top of the usual ones. But there’s strategies you can use to triumph, and protect yourself and those you serve. Here are the top four things to remember as your practice switches gears towards this demographic:
#1: Don’t make assumptions
Avoid ageism and overgeneralization with individual senior clients in terms of abilities, lifestyles and values. People talk about “seniors” as a single demographic segment—but they are diverse, and getting incredibly so. They share the diversity of your younger clients, with great variety in financial situation, computer literacy and well-being. Indeed, many of your retirement-age clients may be ready to quit their 9-5 job—but they’ll remain vibrant and active well into their twilight years. Others may need more support.
#2: Accommodate their needs ahead of time
It’s your job as a professional to prepare your clients for the expected—and unexpected. You plan build contingencies for the possibility of a sudden crisis, like if someone loses a job or if there’s a personal health event. Exercise similar foresight with your practice when it comes to meeting the accessibility needs of senior clients. If your building is older, you may need to renovate for hearing, visual or mobility impairments. That means installing brighter lights, dampening background noise and clearing tripping hazards. For clients who can’t visit your office, get accustomed to the idea of doing “house calls” and even “hospital calls”.
#3: Look out for red flags
Keep on the look-out for “red-flags” signalling deeper problems. Some degree of slowing down is entirely normal in most people. But memory loss, personality changes and inability to understand concepts they used to, for example, may signal cognitive decline, such as the onset of an age-related impairment like Alzheimer's. Other issues to watch for include potential scams and financial abuse. Any client can fall prey to these—but a higher percentage of older people are targeted, no matter how acute they are. Signs of abuse include a client who suddenly becomes reluctant to discuss finances or who gives out-of-character instructions.
#4: Document, document, document
Most lawsuits stem from misunderstandings around investment instructions, fees or risks. Documenting assiduously protects both you and your clients. Archive notes from all meetings, emails to and from the client, and any other pertinent correspondence. Keep a KYC paper trail, noting any changes in client risk tolerance and financial knowledge. Have everyone in your office use the same recording standards and consistent terms, backed by specific examples of changes in behaviour.
A CRM designed for financial advisors can help you manage all this information, making every record related to a client easily searchable and accessible. A financial CRM also simplifies setting up more frequent meetings elderly clients may require—with a calendar and built-in alarms to remind you at certain intervals.
These are just a few small tips for dealing with retirement age clients. For more scenarios financial advisors encounter with senior clients, including strategies for how to respond and what sort of financial advice to give, watch our on-demand webinar “How to Work Successfully with Senior Clients”