Financial Advisors: Economic Downturn Hitting Boomers Hardest
“The current economic downturn has hit at a bad time for people who are in their late 50’s or early 60’s and haven’t prepared for the future,” says Philip E. Harriman, CLU, ChFC, past president of the Million Dollar Round Table (MDRT), an international, non-profit association of more than 39,000 financial service professionals. “With a simultaneous strain on employment, home values and investments, these Boomers are being hit harder now than generations older or younger. If there is a silver lining in this dark cloud, perhaps this is a wake-up call for Boomers to get busy managing their financial well-being.”
The research, conducted in January 2009, was unveiled at a series of Boomertirement® Road Shows, half-day seminars for financial advisors in Dallas, Washington, D.C., Chicago, Los Angeles and New York City, hosted by the Partnership for Retirement Education and Planning (PREP) to provide tools and encouragement for professionals assisting Boomers. PREP is an unprecedented coalition of 11 non-profit organizations representing more than 200,000 financial advisors who are working to provide retirement education to Boomers and younger generations.
Matt Thornhill, founder and president of The Boomer Project, the consultancy that completed the PREP research, says there has been a great deal of study of consumers and their financial situation but relatively little of how the financial services profession is responding to the problem.
“One interesting aspect of the research is that advisors who consider themselves ”experts” at financial and retirement planning and take a comprehensive look at their clients’ financial, family and life goals appear to better serve their clients and to be more successful in their own business than those who don’t focus on either types of planning,” Thornhill says.
According to Thornhill, advisors in the PREP research who identified themselves as “planning experts” reported their typical client had twice the total assets as advisors who were more focused on individual product sales. The self-reported “planning experts” were not significantly different than “non-planners” in years of experience, size of firm, job function or type of products they offer. But, “planning experts” who approach client relationships with a longer-term planning focus had three times the assets under management and reported 40 percent higher annual revenue than the “non-planners.”