We all know why we need to market to baby boomers -- the demographic is huge, and their retirement needs are just as hefty.
But reaching this generation is a challenge that many financial professionals face. Marketing to boomers requires a different approach than marketing to other age groups. It takes knowing your audience and understanding their lifestyles and goals, as well as using the latest tools and techniques to help them achieve those goals or to set their sights more realistically.
None of these tasks are easy when you're facing a generation that is unlike any other in our country's history. Boomers today are healthier and more active than preceding generations were at retirement. In fact, according to a recent report from the U.S. Census Bureau, "65-Plus in the United States," many people have an image of aging that is 20 years out of date.
It's not about surviving -- it's about living
To reach boomers, traditional marketing approaches must be adjusted. Seminars are still a very useful tool, leading to deeper new relationships, but you must take into account a boomer's love of life. It's not just about the money, but how the money enhances the lifestyle. Some financial professionals incorporate into their seminar segments on cooking, travel, and nutrition during retirement. You might also bring in experts to enhance the learning environments.
Seminars can be a good starting point for you to get prospects thinking about their retirement goals. You must understand prospects' current realities and their future goals in order to determine their retirement needs. Only with this information in hand can you begin to recommend a product mix to clients or suggest that they adjust their priorities in order to help them achieve certain goals.
Pensions in peril, Social Security in question
The lifestyle approach discussed above is important, but it's only part of the puzzle. Consider these issues:
>> The retirement marketplace is rapidly changing, creating new realities that boomers must face.
>> Corporate defined-benefit plans are becoming rare.
>> Many pension plans are making drastic changes, such as those that General Motors announced in March 2007.
>> The future of Social Security is in question.
>> Retirees can no longer rely on the government or their employers for a secure retirement.
Many companies are now training their financial professionals so they can better understand the issues boomers face and the products that can help them move into retirement. Traditional products are available that work well for retirement income and protection, but the new realities of the marketplace necessitate a new way of thinking and planning. Some variable annuity products, for example, offer more flexibility and guaranteed income streams than were previously available. These products can be complex, so you need educate yourself and consumers.
As they approach retirement, boomers will face many financial decisions. The client could have several pensions and 401(k)s, as well as annuities and other qualified and non-qualified money that they will need to revisit and reg-ularly analyze.
You have a better chance of retaining clients when you contact them more frequently -- particularly when money is in motion and the clients may be unsure of what they want to do with their retirement money once it's distributed. Additionally, more face time with clients helps further establish your relationship. This can make it easier to address the client's other financial needs.
Once clients retire, it is also important to do a cash flow analysis at your review. This gives both the client and you a greater understanding of what is coming in and what is being spent, and it provides the information boomers need to adjust their financial strategies.
Looking ahead
With so many boomers turning 60 -- roughly 422 an hour in 2007 -- it is expected that as they retire, they will hold more than $19 trillion in assets by the year 2010. It takes effort, expanding the knowledge of both yourself and the consumer and implementing new planning tools and more flexible products.
William Degnan is a senior vice president of AXA Equitable Life Insurance Company and head of its At RetirementSM unit. He can be reached at 212-314-6853.
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