Seniors are the single best large market for financial advisors. There are 44 million Americans over age 60, representing about 16 percent of the U.S. population, and they hold well over half of the investable assets in this country. Therefore, each senior client relationship is generally worth more to you than the average client.
Facts about seniors
Very few seniors are on the Internet. Forget what the studies say. Do your own survey and ask 10 seniors how often they use the Internet. They do not have the self-sufficient attitude held by many baby boomers that says, "Why should I deal with you? I can buy no-load funds and no-load term insurance and get all the information I need on the 'Net." Seniors, on the other hand, have been around the block, and they value good advice. They have lost the arrogance that makes them think they can outdo you at your own profession.
Seniors are not so performance oriented. They will not complain about their portfolio rising 18 percent when the market was up 30 percent. They'd rather preserve what they own than get rich. They do not expect you to meet some impossible benchmark. Seniors value the relationship they have with you and trust in the knowledge that you will look out for their interests.
They have control of their wealth. Their money is typically not locked up in a 401(k), 457, or other institutional plan. They can make the decision to move $100,000 or $500,000 today.
They have a more urgent incentive to take action than a younger person does since a 60-year-old does not have as much of their life remaining as a 40-year-old. This fact gives rise to opportunities for estate planning, long term care insurance, educational funding for grandchildren, and significant investment management fees. Younger investors do not offer this breadth of opportunities for financial professionals.
With seniors, you do not need to sell products and features, and you do not need to have the best fund/policy/program. Seniors buy you, the advisor. Once you earn their trust, they hand over the money and tell you, "If you think it's a good idea, then let's proceed."
What they respond to
1. Sell comfort and security. Do not sell opportunity. Seniors want to protect what they have accumulated. Show them how to do that and how to feel comfortable with their decision, and you have a client for life.
2. Drop all jargon. Never use the phrase "fixed annuity." Instead, ask, "Do you have the type of annuity where the principal is guaranteed but the interest rate has been falling over the last 10 years?" Even the simplest phrases that professionals use can be confusing to clients. It's nonsense to think, as some brokers do, that you need to "confuse 'em to sell 'em." You will gather more assets by being crystal clear in your communications and ensuring that your client understands your language completely.
3. Forget about "closing" these investors. Your presentation must be strong from the first word. A strong presentation flows naturally into an easy close. "If that makes sense, Mr. Jones, what we need to do is complete one of these forms and...." If you haven't sold yourself and built that trust, the close will be harder, and your prospect will be gone faster.
4. Do not assume that seniors want to leave a big estate or provide for their children. They want to provide for themselves first. So focus on current benefits: more income, a guaranteed return, insurance protection for the living. You may know of a variable annuity that guarantees a 6 percent annual minimum return if held until death. That's great, but most seniors wouldn't care if the return was 100 percent a year if they need to die to get it.
5. Respect their experience. If your prospect's next-door neighbor said that whole life is a bad deal, then drop it. Logic is your weakest tool with the senior market. This phenomenon called "the sample of one" means that a senior's single personal experience -- that one data point -- will outweigh the realities of millions and all the facts you can deliver. Educate only when the prospect is open to it, not when they have already told you about "their truth."
Follow these few keys, and you will find the senior market financially and emotionally rewarding.
Larry Klein, CPA/PFS, CFP is president of NF Communications Inc., a certified retirement financial advisor, and a Harvard MBA. Over 14,000 financial professionals use his marketing system to obtain more and better clients, increase money under management, increase commissions, and earn more while working less. Details on his winning marketing systems and his book "Marketing Financial Services to Seniors" are available at www.nfcom.com.
