Tuesday, July 12, 2016

Two Ways to Make Financial Planning Smart, Not Scary

By Cindi Hill, CFP®, CRPC®, Retirement Solutions Consultant, CUNA Brokerage Services

Do you think people are more likely to spend five hours deciding on a car, planning a vacation or working on their retirement investments?

A 2014 Charles Schwab survey of 1,000 retirement savers shows what you’ve probably already guessed: More than half said they spent over five hours on their last car decision, and 39 percent said they’d spent that much time planning their last vacation. But only 11 percent reported spending that much time on investing for their retirement savings.

We get it. Deciding which car to buy or beach or ski hill to visit is fun and easy for most people. But, figuring out how to turn retirement assets into an income stream for the future?  That can be pretty intimidating for many.

The good news is: As financial advisors, we’re here to help turn these experiences from scary to smart for the people and families we serve. To achieve this, we recommend two key tactics that can ease clients’ minds, stress levels and willingness to recommend to friends and family.

First, offer planning tools.
Today, many people face a more uncertain future in retirement than previous generations: Most don’t have pensions and will have to make sure the assets they’ve accumulated while working will support them through retirement. They need financial planning tools that help them understand:
  • Their expenses in retirement and how to prioritize and minimize them.
  • The income they’ll be able to generate based on different variables like when they start to collect Social Security, how much they withdraw each year, and the impact of things beyond their control (like the health of the stock market and the inflation rate).
  • How various asset allocation mixes will affect their nest egg.
Financial planning tools can help clients in all of these areas. Good financial planning tools offer a range of analytics, reports and calculators that produce easily understandable output that advisors can use to help clients understand the challenges of retirement and the best asset mix to meet or exceed them.

Support them with written plans.
To get the most out of any planning tools, we recommend complementing them with a written plan. Why? Think of the times you’ve set goals in your own life—and when you achieved them. We’re guessing you generated more success when you took the time to map out your strategies and tactics. 

Research shows it makes a difference for advisors in more ways than one: A study from
MoneyGuide Pro has found that the broker/dealer firms offering written plans were much more likely to drive referrals: 
  • Without a written plan, clients were only 44 percent likely to refer their advisors to friends. 
  • That probability grew to 75 percent when firms offered a written plan. 
  • And, if another firm created the client’s financial plan, they were 26 percent less likely to refer a friend to their original advisor for help.
For more insights you can use, we invite you to connect with us here and download our white paper on the changing retirement landscape. Or, stay informed on the employment opportunities we have for advisors here.

Are these ideas part of your approach?

The views expressed in the communication represent the current views of the author and do not necessarily represent the views of the management of CUNA Brokerage Services, Inc.

Securities sold, advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor. CBSI is under contract with the financial institution to make securities available to members. Not NCUA/NCUSIF/FDIC insured, May Lose Value, No Financial Institution Guarantee. Not a deposit of any financial institution. CBSI is a registered broker/dealer in all fifty states of the United States of America. The representative may also be financial institution employee that accepts deposits on behalf of the financial institution.