Client Segmentation Highlights the Need for Policy Reviews

Every financial professional understands that clients can have wildly different retirement goals, but it can be hard for insurance producers to evaluate what type of retirement plan will best connect with a specific client. To make things more difficult, an individual client’s retirement priorities are likely to change over time as their life and savings evolve.

A survey from LIMRA identifies the three main types of retirement planning desired by affluent consumers, and highlights the specific issues that are important to each group. These general trends can serve as an important tool for financial professionals. By conducting regular reviews, producers can identify what type of retirement a client desires and tailor their services to match that client’s needs.

Serving clients is a long-term process and no single solution suits every consumer. By keeping LIMRA’s archetypes in mind, a financial professional has a leg up on helping clients achieve their goals.

A new study sheds light on saving and spending in retirement.

Three types of clients
The LIMRA survey discovered affluent consumers fall into three categories regarding retirement planning. The largest group is guarantee seekers. These individuals want to ensure they retain an income throughout their life, and will avoid risks that could build wealth in favor of financial strategies that provide consistent cash flow.

A smaller percentage of high net worth consumers are classified as estate builders. This group prioritizes control and has a strong desire to grow investments over the long term. This gives them a higher tolerance for risk than guarantee seekers, and makes them less interested in the help a financial professional can provide.

The smallest group in LIMRA’s survey consisted of asset protectors. These consumers are motivated by a desire to retain their principal over all other considerations. Their plans for long-term income are focused on interest and dividends generated by the principal and they share guarantee seekers’ aversion to risk.

A state of flux
While these client types are presented as a solid and unchanging, any individual consumer is likely to transition through multiple types as they age. The country’s overarching financial situation, shifts in a person’s own life, such as marriage or the birth of a child, and personal financial successes and failures can all motivate changes in an individual’s approach to retirement. Effective financial professionals remain aware of these changes through regular client reviews.

Advisors should view certain life events or choices as triggers for a policy review, and should reach out to clients following significant life events such as marriage, the birth of a child, divorce or the expiration of a term life policy. Many life events alter who a client would like to name as a beneficiary or impact a client’s need for certain types of policies. By regularly reviewing client needs, financial professionals can offer consumers monetary savings and guarantee they have adequate coverage that fits their financial aspirations.


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