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Major Life Stages, Your Clients, And You.

Jeremi Karnell
Jan 26, 2017

3 Steps To Prepare Them For Change

Whether you work as an individual financial advisor, a broker or a wealth manager, you help your clients through many different stages in their lives. Your oldest existing clients may have come to you at the start of their careers, seeking advice on saving money and how to make the most of their 401(k) and 403(b) plans. As their careers progressed and they started families, they may have sought guidance on setting up college funds for their children and making sure they had sufficient life insurance in place.

Now that those clients are nearing retirement, their focus has changed from saving to spending. Instead of accumulating a sizable nest egg, those pre-retirement clients are now worried about how to make their savings last a lifetime. Once again, they come to you for expert advice and guidance, this time on how to structure their withdrawals and ensuring their carefully built nest egg will be there when they need it most.

Life changes, and whether we notice it or not, our financial needs change with it. As a financial industry professional, you need to be ready for these changes and help your clients react to them. Dealing with major life stages, and guiding your clients through life as a young working professional, to the challenges of family life and finances and finally to life as a financially stable retiree, is an integral part of what you do.

Change happens to everyone, but that does not make it any less frightening. Whether your clients are switching jobs and rolling over their 401(k) funds or getting ready for the permanent vacation called retirement, they rely on you to provide the framework they need to move forward with confidence. Here are three steps you can use to prepare your clients as they move from one stage of life to the next.

#1. Assess the Current Situation

It is impossible to build a road map to tomorrow unless you know where you are today. Whether your client is starting a new job and wondering how to handle their retirement funds, looking for the best way to put the kids through college or rapidly approaching the end of their working life, they should start with a detailed assessment of where they stand.

Depending on how well they have prepared and how much they have accumulated, this review process could be either reassuring or frightening. But no matter what the outcome, this independent analysis is a vital first step. Until that first step is completed, it will be impossible to move forward into the next phase of your client's financial life.

#2. Determine Financial Needs for the Next Stage of Life

Every stage of life has its unique financial requirements, and it is important to conduct a thorough assessment of those needs and how they will impact any future planning. Determining future needs may seem like a kind of guessing game, with the expert advice and guidance you give can make things far more certain.

The needs and expectations of your client will obviously play a huge role during this step. If your client's college-bound son or daughter was just awarded a scholarship, you might be able to reallocate some of their college savings to their younger siblings. If your client longs for a retirement filled with travel and 5-star resorts, they will obviously need a much larger nest egg than the individual who plans to use their post-work years to backpack and enjoy the beauty of nature.

Understanding the needs of your clients will be vital during this step. The better you know your clients, the easier it will be to assess their needs and present them with honest and unbiased advice for the next stage of their lives.

It is important to note that clients may not always express all their needs and desires, so you may need to spend some time drawing them out and having detailed conversations about their future plans. Talking about the next stage of life, whether that stage is education, retirement or something else, is essential, and a critical function for any financial planner or wealth manager.

#3. Set Up Regular Review and Reevaluation Periods

As an individual financial planner or wealth manager, it is your job to set your clients on the right path and prepare them for each new stage in their life. Whether that new stage involves maximizing their earnings and increasing their retirement plan contributions, establishing a college fund for their children, creating a long-term care plan for themselves and their spouse or sailing off into the sunset of retirement, you need to be prepared with the right advice and guidance.

Determining the financial needs of your clients during each new upcoming stage of their lives is important, but it is not the end of the road, or of your responsibilities. Indeed, establishing needs and setting up a systematic financial plan is only the first step, and you must establish regular meetings with your clients to review past decisions and make future adjustments.

Establishing a regular schedule for reviewing the current finances of your clients and making any necessary adjustments will be critical to long-term success. No matter how good you are as a financial planner or wealth manager, it is simply not possible to predict the future with accuracy or precision. Meeting with your clients on a regular basis, making recommendations and adjustments and viewing the current financial plan as a work in progress can all increase the odds of success. It is this kind of hands-on approach that will allow each of your clients to enter their new phase of life with confidence.

Moving through the various stages of life is never an easy thing to do, but the right advice and guidance can make a huge difference. As a financial professional, you understand the value of strategic planning and long-term responsibility, and how taking the right steps now can prepare your clients for a lifetime of financial success.

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