More than ever, financial professionals are forced to contend with a strange dichotomy among clients.
On the one hand, Americans are hungry for financial advice to soothe their worries. However, challenges in helping clients understand their risks, as well as the appropriate solutions, remain obstinate.
From estate planning to long term care, the financial strategy needs of Americans are varied, but data shows the future represents the greatest source of worry for individuals. In fact, according to the 2014 Insurance Barometer Study from the Life Insurance Management Research Association and Life Happens, having enough money for retirement tops the list, just as it has since 2011.
“Being able to afford a comfortable retirement continues to be the most common financial worry among consumers,” the report stated. “This is particularly true of younger Americans, who are expected to live longer while more of the retirement savings burden is pushed on to the consumer.”
However, with life expectancies increasing every day, there’s no doubt a longer life is leading to financial trepidation for all generations, especially those right on the cusp of retirement.
“Clients continue to put off purchasing needed coverage, often citing cost as the primary factor.”
Unsurprisingly, worry over being able to afford long term care was another example of financial concern for the future. Fifty-six percent of individuals between the ages of 45 and 64 cited affording long term care services as their primary concern.
“[Half of Americans are concerned with their ability to pay for long term care services and half are concerned with supporting themselves in the event that they become disabled,” the report continued. “In fact, these have been among consumers’ top five financial concerns over the past few years. Long term care and disability insurance can directly lessen these risks.”
And while there’s no doubt the need for products like long term care insurance is more real than ever, clients continue to put off purchasing such coverage, often citing cost as the primary factor.
Let the news cycle influence your strategies
Sometimes the best way to reach clients and help them understand their needs is by forgetting the abstract and focusing on the here and now.
Using long term care insurance as an example, you’ll find it’s quite easy to let current economic news support your sales strategy.
For instance, when the stock market is underperforming, it typically leads to consumers feeling more worried about their savings.
“When stock markets keep going up and up, people feel richer and anticipate their future net worth will just keep getting better and better,” Jesse Slome, director of the American Association for Long Term Care Insurance, said in a recent media release. “But when stock markets drop day after day as we are now seeing, people start to worry that they won’t have enough money to cover their retirement, health care and the costs of extended care that come from living into one’s 80s, 90s and beyond.”
Economic news, such as what’s happening in the stock market, can give you the tools to help your clients recognize the need for certain products.The effects of stock market fluctuations have been studied by various experts, including Nicholas Bloom, professor of economics at Stanford University. Bloom told Marketplace.org in October that based on previous research, stock market “jitters” are normally followed by “nasty contractions” that fill individuals and businesses with uncertainty.
Financial professionals can make this uncertainty a tool in their arsenal. As clients become more concerned over their financial well-being, you can highlight how products like LTC insurance will provide them with the safety net they require to secure a comfortable retirement and access the vital services they will likely need without paying exorbitant amounts out of pocket.
Meanwhile, a strengthening economy also presents opportunity. When stock prices are on the rise and clients are enjoying increasing wealth, it marks the perfect chance to explore financial products options with them. Because they are in a stronger financial position, they may be more willing to spend money on valuable coverage such as LTC insurance.
The stock market is far from the only current events-related tool financial professionals have at their disposal. The key is to think about how what is going on in the world can help you make your clients recognize the worth of the products and services you’re making available to them.
