In recent years, there has been increasing discussion surrounding the responsibility the financial industry has to protect the interests of senior investors. This comes in the wake of studies by groups like the Financial Industry Regulatory Authority (FINRA), that estimates that seniors lose $2.9 billion per year due to fraud. Now more than ever, it’s critical that financial advisors provide trustworthy support to their senior clients in order to help them safeguard their retirement savings and make the best possible financial decisions.
But what happens when an issue arises—maybe an insurance matter, or something that requires the services of an attorney—that’s not in your wheelhouse? How can you make a recommendation you can truly stand behind, and feel secure knowing your clients are in good hands? For any financial advisor looking to maximize their services to an aging client base, there are five key strategic partnerships that can help advisors know who to turn to when they need specific, expert experience.
- Insurance Brokers
Especially with older populations, insurance might be something that your clients haven’t considered in many years. The insurance market can be intimidating, with many options available for life insurance, health insurance, home and auto, and other forms of specialty coverage available. By building a trusting relationship with an insurance broker who represents a portfolio from many different carriers, you can help your senior clients identify options they might not have known they had when it comes to their insurance needs. This could mean lower premiums, more appropriate levels of coverage, and more flexibility with your clients’ liquid assets.
If you’ve been working with a client for many years, there’s a good chance they already have a CPA they trust to help them prepare their taxes and manage any bookkeeping needs they have. That said, CPAs can be incredibly useful resources, not just to your clients but to you as you consider the implications of making certain decisions with your clients’ money. Having an unbiased accountant standing by to answer any questions or offer your clients a third-party perspective can give both you and your clients some peace of mind. Additionally, CPAs can be a great source of referrals to grow your client list.
Though it’s a lawyer’s job to prepare the paperwork for estate planning, financial advisors are in a unique position to make sure that estate plans are successfully funded and executed. While you may traditionally take a back seat to your clients’ lawyer when it comes to the matter of estate planning, you can be more proactive with the help of a trusted attorney. Working together with someone you know and have a rapport with, you can help your clients plan their estates while considering everything that goes into the process.
- Life Settlement Expert
As seniors enter retirement, many pay premiums on life insurance policies that simply don’t make sense any longer. Maybe some of your clients are struggling to stick to a budget. Maybe others have plenty of assets, and the value of a life insurance policy just isn’t worth what it costs to keep it active or the policy is no longer needed. In either case, you’ll want to have a trusted life settlement partner to help your clients explore the option of selling their unwanted policies. Rather than surrendering a policy and losing the years of investment spent on it, certain clients may be able to earn money selling their policy to an investor—adding more investment power to their portfolio, and more wealth for you to manage.
If you’d like to learn more of the specifics of providing life settlements, download our handy e-book, Serving Senior Clients: Turning High Life Insurance Premiums into Financial Liquidity.
- Trust Officers
Occasionally, senior clients may want to create a trust fund in order to pass some of their wealth on to future generations. This is a complicated process, which requires the services of a trust officer, who is typically employed by the financial institution where the trust’s assets will be deposited. Financial advisors should be ready when this subject comes up by seeking out a trustworthy trust officer at a reputable financial institution who can be quickly and easily brought in to start the process. Keep in mind that trust officers act as fiduciaries in a trust, which means they have a legal responsibility to manage trusts according to the best interests of your clients and their beneficiaries.
Over the next 15 years, 10,000 Americans per day will turn 65. As your client base comes closer to retirement age, it’s critical that you put these relationships in place to be of the utmost service and help your clients at every step of their financial lives.
David, age 74, had a 20-year $500,000 term policy that was about to expire. He was going to let it lapse until he discovered that he could sell the policy. His policy was converted to a permanent universal life insurance contract and sold for $75,000. David used the proceeds to purchase long-term care insurance coverage.