Talking about long-term care isn’t easy no matter how unique the situation. Working with a financial professional to traverse these sensitive issues may do a lot to make clients feel better about living comfortably in retirement. However, with the demographics of advisors changing along with the general population, working through these challenges may become more difficult. This dilemma demonstrates perhaps the biggest issue facing the financial services industry, and especially for life insurance professionals.
According to a recent survey from Nationwide Retirement Institute, two-thirds of women over the age of 50 are concerned that they may become a burden on their families as they age. For comparison, only 50 percent of men say they share this concern. But women seem especially hesitant to speak about these worries with their family members. Nationwide also found that 62 percent of respondents at or near retirement age have not spoken to anyone about the costs of long-term care.
Clearly, women have placed their retirement needs at the forefront of their concerns, yet don’t want to discuss these issues. This may lead family members or even financial professionals they already work with to the conclusion that clients don’t have strong opinions about long-term care. In fact, this couldn’t be further from the truth. In asking more detailed survey questions regarding long-term care, Nationwide found some surprising opinions held by the majority of these women. More than two-thirds of women aged 50 and older are strongly against living in a nursing home, and would instead prefer to receive care in their own residence. Almost half are willing to give a significant portion of their money to their children as well.
Considering the results of these studies, Nationwide stressed the importance of financial professionals who can understand these complicated issues and discuss them with clients in a sensitive manner. The sooner clients can begin working with an advisor to establish solid strategies for retirement and long-term care, the better clients should feel about what lies ahead.
Advisors aging as well
However, the issue may be further complicated by the characteristics of advisors themselves. The Pittsburgh Post-Gazette recently reported on the trend of financial professionals aging in increasing numbers, along with their clients. The Post-Gazette cited research from consulting firm Cerulli, which found that the average age of financial advisors in the U.S. was about 51 years old. Forty-three percent of all advisors in the country are older than 55. This means that clients who are just now seeking the advice of a financial professional for long-term care concerns may find their advisor is in the process of planning the same situation for themselves.
Having a financial advisor who is also in the midst of retirement could work to the benefit of a client. The advisor certainly would be able to relate better to their situation, which may help clients feel more secure. However, clients need financial support throughout their entire lives, and may feel concerned about an advisor who will not stick with them for the long haul. Andrew Stoltmann is one financial professional the Post-Gazette spoke to who recognized this issue.
“It’s an under-the-radar issue,” Stoltmann said, according to the Post-Gazette. “We always talk about investors getting older. The flip side is advisers are aging as well, and that’s problematic for investors.”
To combat this, financial firms are working hard to maintain the trust of their clients. This starts primarily with a focus on attracting and retaining younger talent. The Post-Gazette spoke to the CEO of one Pittsburg-area firm which had recently bolstered its ranks with younger advisors. With new hires made, 70 percent of the firm’s full-time advising staff is now under 50 years old, and 38 percent are younger than 40.
Many firms are also adopting smarter policies related to how client portfolios are handled. Firms may choose to place a senior advisor with a high-profile client nearing retirement at first. At the same time, a more junior advisor is placed with the account as a basic financial planner. In the event that the original advisor must move off the account after a few years, the junior can take over with a working knowledge of client and still deliver a high level of personalized service.
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