In this business most clients are members of either the pre-retiree (55 to 65 years-of-age range) or retiree (65-plus) classes. Anyone younger than that, relatively speaking, may be considered a younger prospect, some would say an endangered species especially when it comes to long term care insurance.
Providing basic investments, life insurance and even retirement planning is a reasonable goal for younger prospects. It's easy for them to see the value of long-term investing and a death benefit once items like children and a mortgage come into play. But the idea of this group needing long term care insurance, i.e., assistance with basic daily living functions, can be as far removed as space travel.
The questions for senior advisors looking to address this class, which definitely has long term care needs, is: how do you make them aware of the need for long term care insurance when they are relatively young and have other more pressing financial needs? This question has dogged many in the industry practically since the first policy was introduced. While there's no one answer, many feel introducing the issue and working to remove misconceptions are the two roads to success with this group.
"Communication with the younger clients is the biggest difference," says Judd Carlton, CFP of Glassner-Carlton Financial Services in Cedar Knolls, N.J. "Many younger clients need and appreciate some perspective on how to approach financial decisions, especially when the only example they know is usually parents or friends who are in a totally different place financially."
Setting expectations, says Carlton, is an important part of imparting perspective to younger clients. "A quick Google search can return a dozen blurbs from popular media sites with unspecific cure-all tips, but the bigger decisions often have many shades of gray that require longer discussion. Accepting that it will take some time to make an educated decision can be a big step."
When dealing with previous generations, individuals entering their 50s were generally preparing to slow down. Traditionally the 50-year-old threshold was considered an age of personal stability. Often workers were entering their peak earning years at this point, while spending tended to decrease as children were grown and homes paid for. Today's 50-somethings are remarkably different from the World War II generation which typically defined success as having stable employment, paying off the mortgage as quickly as possible and not getting divorced. Today this is a group with members that frequently change jobs, relocate, start second families, help their children pay for higher education and take care of elderly relatives. And they can be a tough sell.
"This is a group that is often skeptical that a professional advisor will add any value beyond what they can glean themselves from popular media," notes Carlton. "It's critical to demonstrate that your advice delivers cost, tax and time savings and reduces risk."
They also have a penchant for borrowing, frequently from their self-directed retirement account and have been comfortable with debt. With this in mind, presenting a new product, no matter how useful, can be perceived by the prospect as "another expense" for which they are not prepared to handle.
"This generation has a lot of responsibilities," notes Scott Veronese of William Tell Financial Services in Latham, N.Y. "Many of them spend and are poor savers. Others mistakenly believe the government will be there for them in their old age. Still others think they'll be able to sell their house and easily downshift or move in with one of their children."
