Working With Your Clients' Parents is Part of Holistic Planning

by Certified Coach Alissa Gauger, MBA 

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What are some of your favorite topics to broach at family functions? I’m guessing they are religion, politics, money…and your most favorite—really everyone’s—is probably the advancing age of your parents and what their plans are should they ever need long term care (LTC). Who’s with me!

If this is not your reality as a financial representative (FR), imagine how hard the conversation about LTC and other financial matters is for your clients with their parents!

Perhaps your client’s parents are quietly expecting their adult children to provide them with care (and your client may not be able or want to do so). Maybe your client’s parents assume their Medicare/Medicaid, Social Security or other savings has it covered.

“My parents already have someone they work with,” is something your clients might say when you offer to reach out to their parents. That’s not going to cut it.

“The vast majority of advisors, unfortunately, are still recommending traditional courses of action that can actually hurt the retirees down the road by making more of their money susceptible to the surcharges and higher tax formulas. These advisors are unaware of the new laws, and the alarming trends that recent proposals imply for their clients,” writes Dan McGrath and 7 other authors in the book “What You Don't Know About Retirement Will Hurt You!” 

Are you really delivering on the promise of holistic, integrated financial planning for your clients if you don’t include your client’s parents as part of your routine process? The reality is that they need you to do so. “A study released by Northwestern Mutual found that most Americans have not addressed long-term care in their planning, despite understanding that it will be needed,” stated Northwestern Mutual in “The Longevity Revolution: Costs of Caregiving.”

It’s entirely possible that your client may need to dip into their assets prematurely to cover others’ care. Is that in the plan? I’m guessing it’s not even on the radar!

While prospecting with your client, make it a routine part of the service you provide to tell the people you work with that giving their parents’ plans a double-check is a regular and necessary part of the planning process for everyone. While many of your clients’ parents may be affluent, have multiple advisors and believe that they are covered they may, in fact, still need your help and not know it.

While financial security is important, there is another reason to integrate this step into your process: what if your clients' parents are unable to access care? This is not something that our country has even dealt with yet. McGrath writes that the reality is that it’s not even only about having the means to pay for LTC anymore—it’s about access and having the right LTC plan to ensure it.

There is a projected shortage of facilities, beds, staff and physicians to serve the large Baby Boomer population as soon as the year 2020. (Our country will be an estimated half a million beds short in merely four years, according to McGrath.) LTC planning “is no longer about protecting assets in retirement; it has become the best negotiating chip one can have to access care in retirement.”

While the benefit of prospecting up with your clients to reach their parents is obvious for your client, it is tremendous for you, too. First, your clients are unlikely to encounter this service elsewhere in the market and it is a differentiator. Second, your practice will grow by reaching the Boomer market through this natural added step. Third, you can be confident that your client will likely have the lifestyle and retirement you said they would (no surprises).

“Regardless of your income, or level of assets, having a LTC plan in place to address the risks and costs of one of the biggest financial threats you may ever face, is a smart move, and can protect both assets and those you love,” writes McGrath. Help your clients by helping their parents and their loved ones. It’s a win-win-win.

Coaching Tip Many FRs are intimidated by the mere thought of asking to work with a client’s parents. By overcoming the beliefs that hold you back from prospecting up, you and your clients have a lot to gain. What’s the “story” you tell yourself about working with your clients’ parents? You’re too young, not experienced enough? Perhaps prospecting might wreck the great case you have in front of you? How likely is it that your “stories” are true? Ask yourself “what is the worst thing that would happen if they were true?” I’m guessing that NOT asking has a worse outcome long term than being courageous in the best interest of you, your clients and their families. Make a plan (language, technique, practice, etc), start with trying it in just one meeting and build on it.