Helping Clients Rethink Retirement

August 23, 2016

by Dan Richards

Ask successful advisors where they add the most value and most answers will revolve around financial outcomes – developing the right financial plan, improving returns through diversification, lowering taxes and managing risk. But a recent conversation with Pamela, a successful advisor who attracts clients via “Countdown to Retirement” workshops, raised the question of whether advisors need a broader definition of their purpose. Pamela helps clients rethink how they’ll spend their retirement. Indeed, her website is headed “Guiding clients to a successful retirement.”

Retirement
Image source: Pixabay
Helping Clients Rethink Retirement

What business are you really in?”

The late Ted Levitt was a legendary professor of marketing at the Harvard Business School. In 1960 the Harvard Business Review published his article “Marketing Myopia”, among HBR’s top selling articles of all time. In it, Levitt explored why the once dominant railroad industry was blindsided by competition from automobiles in the 1920s and why Hollywood movie studios ignored competition from television in the 1950s. His conclusion: They defined their businesses too narrowly. Railroads didn’t understand that they were in the transportation industry and movie studios that they were in the entertainment industry.

Levitt maintained that the most important question for any enterprise is “What business are you really in?” Over 50 years later, many top business schools still use “Marketing Myopia” in their marketing courses. As low-cost online portfolios become more readily available and financial advice gets increasingly commoditized, we must ask if financial advisors who define their business narrowly around financial matters are making the same mistake the railroad industry made in the 1920s and Hollywood made in the 1950s.

Becoming the go-to name in retirement planning

I met Pamela at a conference earlier this year. Based in a large city in the Midwest, she delivered 30 half-day workshops to employees of 20 companies in her community last year. Pamela described how she fell into her niche of delivering workshops to help singles and couples prepare for retirement, paid for by the companies where they work.

It began over 10 years ago with a conversation about retirement plans with a couple in their early 50s whom she’d worked with for some time. Like it is for many affluent clients, travel was high on their list and they had accumulated a list of destinations they planned to visit. Pamela asked whether they’d thought of ramping up their travel immediately rather than waiting for retirement and talked about some existing clients who’d waited until retirement to travel only to run into health issues. She and the clients spent half an hour talking about this, during which time Pamela shared observations about the travel that her clients found the most satisfying and offered to run some numbers on the impact of spending $10,000 annually on travel in the years leading up to retirement.

As they were wrapping up, the woman said to Pamela: “You realize that the more we spend on travel, the less we’ll have to invest with you?” Pamela’s response was that she measures success not by the assets that clients have with her but rather by their ability to achieve their goals and lead satisfying retirements without having undue worries about their finances. A week later, Pamela got a call from the HR director of the company that her client worked for, saying that her client had passed her name along and asking if she was interested in running a half-day workshop for clients retiring in the next couple of years and their spouses.

From that modest beginning Pamela has built a significant presence in the HR community in her city. Less than half the workshop is devoted to financial issues, with the majority of time spent tapping into the research on the factors that lead to a successful retirement. Pamela meets with any workshop participants interested in becoming clients after the workshop, making it clear that she charges all individual clients for development of an initial financial plan.

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