Mike McGlothlin, CHFC®, CLU®, CFP®, LUTCF®
You’ve heard that you need to adapt to stay relevant. And, those who are the best at it are able to anticipate upcoming changes, rather than just react to them. When it comes to your business, that means paying close attention to what your clients want today, but also to what they want to achieve in the future. And if you don’t change your playbook, you’re going to miss the goal.
According to a Gallup and Harris poll, clients today only value asset allocation services at about 40 basis points. But they value tax planning services at closer to 100 basis points. And, of course, the value of tax planning really comes into play during the income stage — a stage many of your clients are rapidly approaching.
It’s time to focus on income planning, not asset accumulation.
It means shifting certain parts of your practice but keeping certain parts — such as your pricing model — the same. And it’s easier to make the change if you can partner with someone.
As we move forward, changes in demographics are going to lead to more than 18 million Americans leaving the workforce and moving into retirement in the next five years. And when that happens, the focus will be on income. Asset allocation won’t be near as important as it was. In fact, I would argue that the new currency is how well do I plan for income?
Unfortunately, in addition to the shift into retirement, we’re also facing the reality that most people simply haven’t saved enough. The time to start planning for that is now, and even that is a big job. Currently, there is one financial advisor for every 76 baby boomers. But in five years, when we see that huge retirement shift, there will be about 176 retired baby boomers to each planner. That’s 176 of them to one of you. On the court, that would be terrifying. But for your business, there’s an opportunity to gain clients and make an impact. Income planning is the way to do that.
The scary thing for our industry, though, is that more than 85% of baby boomers report that they will leave their current financial planner if they fail to have a conversation about how to maximize Social Security and income planning. This means you need to be talking about where your clients want to be, not just where they are today.
At Ash Brokerage, we have the resources to succeed, including one of the leading retirement income software tools out there. We also have an abundance of expertise with our retirement income consultants. Reach out to our team at (800) 589-3000 to learn how we can get your business to where it should be going — not where it is today.
If you want to retain your clients and set them up for success, it’s time to focus on income planning. We’ll show you how.