Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues. To submit yours, email us here.
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Dear Readers,
I received a number of very nice notes on my article about how advisors can improve their life-coaching skills. One of the themes was around retirement. I ran the defined contribution full-service unit for a large insurance company in my corporate life. With decades in the advisory industry, I’ve observed that we focus on our clients saving for retirement and then protecting what our clients have earned through legacy planning. But we often don’t adequately prepare people for the significant life transition that retirement represents.
This was made clear to me when my own mother broke down in tears one day. She was a senior executive in a bank, working her way up with only a high-school education, and felt she “had to” retire at 65. Now, 20 years later she is healthy enough to do Zumba three times a week and she deeply regrets stopping work so early in life with no plan of what to do next!
From a life-coaching perspective, retirement is one of the most important changes one makes – whether forced upon an individual or planned for in advance. Helping your clients redefine retirement is critical. In fact, even the word, “retirement” is daunting. If you “retire” something, a piece of clothing, sports equipment, a favorite activity, for example, it means you put it in mothballs never to be seen again! To “retire” something is to discard it.
Here are a few ideas about how to redefine the stage where a client moves from full-time work to another stage of their life:
- Start by talking about the life journey in phases. Traditionally our industry has looked at two stages –accumulation where a client works and saves; and distribution mode where there is no longer a full-time income. For some people, this may be the way they live their lives, but the economy is changing and so it is better to talk in several phases: education (which can last throughout a lifetime, one of my coaching clients is in her 50s and obtaining her PhD, she needed help figuring out how to save for this very late in life!), a career that allows you to live the life you want to lead (this could be full-time or in the profitable “gig economy,” you may have to help your client think about health funding and retirement planning in an entirely different way), moving throughout careers (many people take two or three different career tracks, how can you help your client think these through?), and ultimately slowing down in one way or another (but this might involve picking up something else such as not-for-profit work, a new “gig” or taking care of children and grandchildren). These phases don’t always neatly track the way we’ve traditionally thought about them in terms of the step 1, step 2 and step 3 approach.
- Focus on values before you focus on goals and objectives and savings targets. What is most meaningful to your client? This isn’t just about legacy planning; this is about the here and the now. How can you help your client incorporate things that are important to them? Yes, saving is important and planning for whatever big life transitions might come along, but help them make the most of life today. For example, if your client values volunteering and thinks about doing more in retirement, can you help them think through where they might be able to get involved? If they want to someday turn a hobby into a profitable endeavor, can you help them think through steps they can take to prepare for this? If they want to save for traveling, is there a way to carve out some money to take trips before retirement?
- Paint a picture of what post-full-time, career life might look like. Do this when someone is in their 30s or 40s or 50s and not when post-career distributions are bearing down upon them! What kinds of things fulfill them? What would they do if they had all of the time in the world available to them? What if cost were no object? Create a normal week – what would happen Monday through Sunday if the sky was the limit? Where would they go, who would they see, what would they fill their days doing? These are the kinds of questions you can ask to get them thinking about what a new life could look like. You might even have the client paint or sketch what this looks like. Some people get stuck thinking about what could be, and they need to leverage the right side of the brain for more creativity. Don’t limit yourself to Q & A. Use art or writing as an outlet to help your client identify these areas.
- Ask them what they love most about their current work, and what they like least. For many people, and my mom was a great example, they truly love their work. She adored her team, loved what she did and took a lot of pride in having climbed the ladder to a very senior role. Losing all of that was devastating. She had no replacement for some of the good feelings that came from her work. If you knew your client loved managing people and was going to miss that part, brainstorm ways to replace that element in their new phase. Could they volunteer at someplace like SCORE to help new businesses, be a coach or mentor or do part-time work in a management capacity?
Many people get stuck thinking about the “should bes” in life – they need help creating new ideas that they haven’t thought about. Our industry has traditionally played into these “should” scenarios by creating one path to success. Work hard, save lots, have plenty for retirement and then live the life you have dreamed about with no work responsibilities attached. That’s a false scenario because many of us enjoy what we do and the thought of no longer doing it is depressing.
While many of the things outlined here are not “financial” per se, they are important discussions to have with your client to plan for the best ways to live their lives, throughout the many different phases, and to use their finances as a tool to get there.
As my kids used to say “YOLO” – you only live once. Your clients won’t be happy if they get to retirement, have all the money they need, but are miserably unhappy because they didn’t get a chance to think about everything other than the money aspect. Start thinking about how you can redefine “retirement” and work with your clients in a more open, creative way.
Beverly Flaxington co-founded The Collaborative, a consulting firm devoted to business building for the financial services industry in 1995. In 2008, she co-founded Advisors Trusted Advisor to offer dedicated practice management resources to advisors, planners and wealth managers. She is currently an adjunct professor at Suffolk University teaching undergraduate students Leadership & Social Responsibility. Beverly is a Certified Professional Behavioral Analyst (CPBA) and Certified Professional Values Analyst (CPVA).
She has spent over 25 years in the investment industry and has been featured in Selling Power Magazine and quoted in hundreds of media outlets, including The Wall Street Journal, MSNBC.com, Investment News and Solutions Magazine for the FPA. She speaks frequently at investment industry conferences and is a speaker for the CFA Institute.
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