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How to Help Clients Have Difficult Conversations in Later Life

In partnership with the Financial Therapy Association, the Financial Planning Association® recently introduced a series to help financial planners prepare for working with clients experiencing life-changing situations. The new three-module, self-study online courses focus on common emotional events and share researched therapeutic techniques that financial planners can immediately use in their practices.

The first of the three-part series—Difficult Conversations in Later Life Planning—was relevant to financial planning practitioners as the average age of a wealth management client is 62. In addition, a future orientation is essential to financial planning which will necessitate conversations about later life even with younger clients.

See what you missed in the first installment of this Difficult Conversations Program Series:

Why Is This So Difficult?

Discussions around later life are difficult. Some common reasons include:

One of the most daunting reasons behind the increased difficulty in navigating these types of conversations is the concept of the fourth age. The fourth age is when a person becomes increasingly more dependent on others for daily care, usually starting at around age 80 or 85 and continuing until end of life.

The third age—the age after retirement—has become an increased focus as overall health has increased and people look forward to talking about what life will look like when they have more free time on their hands. But the fourth age is marked by health concerns and mortality is often scary for clients to even think about, much less plan for.

Part of the fear for clients is the idea of ambiguous loss—which is when we begin mourning something or someone that is not completely gone. There are two types of ambiguous loss:

  • Type 1: a person is physically absent but psychologically present (a child leaving for college)
  • Type 2: a person is physically present but psychologically absent (someone suffering from dementia)

While there are many examples of ambiguous loss in financial planning, the majority occurs when talking about the fourth age. This includes ambiguous loss around one’s identity when talking about retirement plans, or around one’s vitality when talking about deteriorating diseases (like MS or Alzheimer’s) and having to plan for long-term care. Financial planning education programs provide incredible training on how to handle the numerical side of planning for later life, but many of us feel inadequately trained in how to handle the human side.

What Can Planners Do?

Mental health theories can be applied to the financial planning process utilizing financial therapy techniques. The first webinar in the series focused on helping financial planners aid families in building resilience in the different stages of ambiguous loss through the use of these techniques.

Here are guidelines for planners to use these techniques in their practices from the webinar:

  • Finding meaning. Allow time for your client to tell their story and use reflective listening to elucidate the meaning they are formulating.
  • Tempering mastery means helping the family control what they can control and let go of the things they cannot control. Create multiple financial planning scenarios to allow them to feel more in control.
  • Reconstruction identity. Planners help reconstruct identities and roles within the family to help the family come to terms with changes that will occur around identity. Focus on how their identity may evolve around the ambiguous loss and use open-ended questions to help them create a new sense of identity.
  • Normalizing ambivalence. Families will sometimes experience ambiguous loss, which could make people feel scared, anger, guilt and shame all at once. Explain the concept of ambiguous loss to your client and how multiple conflicting feelings is completely normal to avoid any sense of guilt or shame.
  • Revising attachments. Encourage your client to get involved in their community (church, volunteering, etc.) so that they can have the social capital they need to avoid isolation.
  • Discovering hope. Instill hope in the family by asking supporting family members about their future dreams and goals beyond caregiving needs.

These guidelines do not need to be utilized sequentially. There are times where you’ll need to circle back. Instilling hope is one of those guidelines that should be at the forefront of financial planners’ minds throughout the planning process.

What’s Next?

We all know that financial planning as a profession is evolving to meet our clients’ needs in more than just the numbers. Financial therapy allows us to provide more holistic care to our clients facilitating trust and understanding that fosters the planner/client relationship.

The webinar provided a brief introduction of all of this and more, while also providing wonderful supplemental materials to help financial planners integrate this into their practice, including a video role-play demonstrating how one financial planner does this with her clients.

The webinar recapped here, plus the other two in the series, will be available as an on-demand package later this summer. Stay tuned to learning.onefpa.org for more.

Tune in today at 2 p.m., EDT, for the second installment of the series: Encouraging (Not Enabling) Adult Children Towards Independence. And save the date on June 25 at 2 p.m., EDT for the third installment: Couples Dealing with Financial Infidelity.

Smodic

Shelitha Smodic, CFP®, is a private wealth adviser at Westwood Wealth Management, based in Houston, Texas. Prior to joining Westwood, Smodic worked in supply chain strategy and design for the consumer products industry, including roles at Sysco Corporation, Coca-Cola Refreshments, and The Clorox Company. She earned a bachelor of science in business administration with a dual concentration in supply chain management and international business from The University of Tennessee. She is currently pursuing a master of science in personal financial planning from Kansas State University. She is an active member of the Financial Planning Association of Houston where she serves as the Pro Bono Director.

McCoy

Megan McCoy, Ph.D., LMFT, is a professor of practice at Kansas State University where she teaches courses for the Financial Therapy Certificate Program. Her research interests focus on Financial Therapy and how to create more empirical evidence to support work that she has seen change so many lives in her clinical experiences. Her work has been published in The Journal of Financial Therapy, The Journal of Financial Planning, The Journal of Family Economic Issues, The American Journal of Family Therapy, Journal of Systemic Therapies, Women and Therapy, Journal of Couple and Family Therapy, Journal of Sex and Marital Therapy, and Journal of Creativity in Mental Health. Dr. McCoy serves as secretary on the board of the Financial Therapy Association. She is the guest editor for the Journal of Contemporary Family Therapy’s upcoming special issue focused on financial therapy and the associate editor of profiles and book reviews for The Journal of Financial Therapy. Dr. McCoy has practiced financial therapy with clients in her private practice and alongside financial planners in conjoint sessions. She is currently developing a computerized version of Narrative Financial Therapy with Morningstar and plans to run randomized control trials later this year.


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On the Long Road to Retirement, Checkpoints are Key

Short-term actions yield short-term effect. This is especially true in financial education, where a recent report from the Pension Research Council at The Wharton School found that programs that follow up with participants or that operate continuously are most effective.

Our financial lives aren’t static; they change throughout the retirement saving process.

It may be time to evolve past a one-and-done education strategy in favor of planning that’s both consistent and dynamic.

According to the study, financial education programs that included follow-ups delivered to employees around the age of 40 optimally enhance savings by close to 10 percent at the time of retirement. Assuming a retirement age of 67, employees who have been followed up with since age 40 will have logged nearly 30 years of personalized education by the time they retire. That adds up to a lot of opportunities for plan sponsors to continue to support employees by engaging through tactics that work best for the particularities of the demographic involved—whether through videos, print materials, live sessions or even podcasts.

To paraphrase an old political phrase about voting, “educate early, educate often.” An employee who planned to retire at 65 but didn’t save enough may be hard to reach, especially late in his career. Our previously mentioned well-served mid-career employee is bound to be more willing to listen and learn. The key takeaway you can impart to your clients is to establish enthusiasm and confidence in retirees at the outset of the planning process, then build a strategy based on this solid foundation.

Bridging the Retirement Conversation Gap

More education is good, but a consistent schedule of relevant follow-ups is even better. For example, companies might improve their enrollment protocol by offering a week of employee presentations and meetings instead of one afternoon. That’s an important step, but it still overlooks the fact that planning can take decades. Typically, conversations about retirement take place during two periods. The first discussion happens when the worker is first hired and probably covers plan details and enrollment policies. The second may not occur until the worker is near retirement, at which point it’s a little late to make adjustments.

To keep the lines of communication open and flowing, advisers can add value to their plan sponsor clients by helping them maintain an ongoing and varied dialogue with their plan participants. Consider staggering the delivery of materials so the recipient doesn’t feel overwhelmed, and craft a follow-up game plan to suit personality types, schedules and status (newly enrolled, on track, running behind, nearing retirement).

Following up with participants may also mean checking in on general financial concerns such as daily living costs and paying down debt. Perhaps they’d like to receive advice about overall financial wellness as well as retirement. Even if they’re not quite on track after receiving guidance, in many cases they’ll still feel better after a chat.

Another opportunity to add value may arise when participants who initially don’t qualify for a contribution matching program become eligible later on. Whether or not the matching policy is clearly articulated by the employer—and in a perfect world, it always would be—your clients can enhance their service model by staying on top of eligibility along with other details.

Retirement planning is a long road for everyone involved—advisers, plan sponsors and, of course, the retirees themselves. You might think about emphasizing the importance of follow-ups by comparing them to friendly inns along the way: they provide the perfect opportunity for all parties to reflect on how far they’ve come and prepare for the next stage of the journey.

Learn more about retirement strategies and solutions through Janus Henderson Investors’ Defined Contribution program.

Editor’s note: This blog post originally appeared on the Janus Henderson Blog here.

Ben Rizzuto

Ben Rizzuto, CRPS®, is a retirement director for Janus Henderson Investors. In his position Rizzuto works with financial advisers, platform partners, Janus Henderson colleagues and clients to find solutions for today’s increasingly difficult retirement issues, whether they be within retirement plans or for those clients that are trying to figure out how to retire on their own terms. He also contributes to the dialogue surrounding these issues as the host of the “Plan Talk” podcast and through periodic posts to the Janus Henderson Blog.


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5 Exclusive Tips To Maximize Customer Experience—The New Frontier

Beware the new reality: Marketing is no longer in control of your brand. Rather, customer experience (CX)—the actual experience your customers are having—is.

Because customer expectations are at their highest levels, CX has superseded customer service and branding to become a key driver of retention and acquisition. Consequently, a brand’s success hinges on creating personalized experiences and delivering them in an authentic manner that resonates with customers and makes them feel valued and appreciated.

Astute and innovative companies are swiftly diverting significant budgeted dollars from branding and marketing initiatives toward CX. In this new paradigm, customers dictate all aspects of their relationship with your brand, thanks to the ubiquitous mobile, social and web technologies. In the words of customer service expert Jack Mackey, “You can say what you want about who you are, but people believe what they experience.”

Gartner defines CX Management as “the practice of designing and reacting to customer interactions to meet or exceed customer expectations and, thus, increase customer satisfaction, loyalty and advocacy.” CX is the emotional representation of how your audience perceives your brand. It is about listening to your customers and acting accordingly. Delivering a successful CX is crucial for an adviser for the achievement of three key strategic goals: (1) Drive customer loyalty; (2) create brand evangelists who will promote your brand; and (3) attract and retain new assets.

Make CX Your Best Product Offering

When it comes to competing on CX, engagement is of paramount importance. Consequently, begin by making CX the best product your firm provides. Make your message memorable, entertaining and valuable, and leverage any available client data to extract maximum value from the interaction at any touch point of the sales journey.

To create a powerful and effective CX, you must ensure that your clients’ offline experience matches the online one. For the latter, the use of video is of paramount importance. Consumers’ thirst for video seems unquenchable and marketers are responding in kind. Video, far better than words, appeals to the visual and emotional part of a consumer’s brain, thereby facilitating a better and faster understanding. Most important, video establishes an emotional bond that even the best-written material cannot achieve. (For more details, read my InvestmentNews article, “Use Video to Connect with Clients.”)

Five Ways to Improve CX

Any CX must be able to deliver highly targeted and personalized messages to your audience at the correct touch point. I suggest five basic steps that advisers can take to create a meaningful and rewarding strategy that will help them improve client satisfaction, expand their book of business and increase revenue:

1.) Establish your vision

The easiest way to define your vision is to create a set of statements that act as guiding principles and that will drive the overall behavior of your organization. Every member of your team should know these principles by heart and they should be embedded into all areas of training and development.

2.) Become customer-centric

Put your customer first, and at the core of your business. Becoming customer-centric means you use any client data available to better understand your clients, and align your business growth strategies and policies with their needs. This is not only a sound business strategy but, as a Deloitte and Touche research pointed out, it also empowers a company to become up to 60 percent more profitable.

3.) Listen to the voice of customer (VOC)

The secret to attract and retain clients and assets is not fees or products, rather it is the CX that an adviser offers. Consequently, taking into account the voice of customer (VOC) is of crucial importance. VOC—a term coined by Abbie Griffin and John R. Hauser in an MIT Marketing Science paper—is the process of capturing client’s feedback to formulate a detailed understanding of their requirements. Customer feedback is an invaluable asset for an adviser. It provides crucial intelligence to gauge what works and what needs improvement. VOC allows you to leverage one of the skills clients value the most: your willingness to listen.

4.) Build an emotional connection

In the words of consultant Simon Sinek, “People don’t buy what you do, they buy why you do it.” Ergo, make emotional connections with your clients your competitive advantage! The best customer experiences are grounded in emotional connections. Scientific research confirms that emotions shape attitudes and drive decisions. Loyalty is directly correlated to a customer’s emotional attachment to a brand. According to an article titled “The New Science of Customer Emotions,” in Harvard Business Review, “When companies connect with customers’ emotions, the payoff can be huge.”

5.) Deliver omnichannel customer experiences

Clients are expecting from you the same level of multichannel engagement they receive from companies like Amazon and Zappos. To be effective, your omnichannel engagement must go beyond the mere distribution of information through different channels and match clients’ preferred means of communication. The line between online and offline engagement is blurring fast and consumers demand engagements that allow them to seamlessly switch channels or devices while interacting with your brand.

Consumers have developed high expectations as a result of interacting with brands that offer them a user-centric CX. Advisers should switch their focus from customer service to CX as a way to prove to their clients a genuine commitment to customer satisfaction. Allocating time and resources today to deliver an engaging and compelling CX will put advisers ahead of the curve and position them well to cash meaningful dividends for years to come.

Claudio Pannunzio

Claudio Pannunzio is the managing director of Cürex Group Holdings. He was formerly the president of i-Impact Group Inc. in Greenwich, Conn.