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Looking Beyond Asset Management: Top Four Ways Financial Advisors Add Value for Aging Clients

A large percentage of retail investors still view financial advisors as merely asset managers—consultants whose sole objective is to “pick winners” and generate investment returns for their clients.

With that said, the tide of client expectations has been changing steadily, and a growing number of retail investors now view their financial advisor as a “financial ringmaster,” someone who orchestrates all the various financial planning components of a client’s life. This includes asset management, of course, but also estate planning, legacy building, long-term care planning and insurance.

Two principal factors have driven this change. First, there has been a proliferation of asset management solutions across the industry over the past decade, from an array of third-party specialty offerings to an increasing number of low-cost robo advisors. As a result, advisors can no longer differentiate themselves by simply delivering better returns or by providing asset management at the lowest possible price.

Second, the pre-retiree and retiree segments of the population are now entering the distribution phase of the personal finance life cycle. This means their goals have less to do with investment performance and more to do with ensuring all the different pieces of their financial life align to support their life and legacy goals.

Put simply, aging investors need more than just a money manager.

Here are four ways advisors can best add value to their practices for aging clients:

A holistic view of insurance. Clients typically don’t look at insurance in the same way as other asset classes, such as stocks, bonds or cash instruments. Advisors need to help them understand that insurance is a crucial part of their portfolio and must provide sensible solutions that are practical and relevant to each stage of their life. Conversations about insurance need to occur early enough to allow clients the time to take full advantage. That’s particularly true in the case of long-term care and health insurance policies, which are increasingly more difficult to obtain with age. It is also crucial to implement strategies that will protect assets (such as property and casualty insurance) and generate additional streams of income in retirement (such as variable annuities).

Estate planning. Advisors should be able to offer their aging clients robust estate planning capabilities. These services could be provided in-house with the help of a staff specialist, through a third-party provider such as a broker/dealer or estate planning law firm, or any combination of the two. Whatever the case, the important thing is that you, the advisor, can offer clients a seamless experience without multiple points of contact or conflicting information delivered from different voices.

Elder care planning. While your clients may conflate this issue with insurance, elder care is a much broader concern. It’s important to become comfortable discussing issues that clients may not want to talk about, such as dementia, illness and death. The end goal of these discussions is to formulate a plan for the very real possibility that at some point in the client’s life, managing their personal affairs could become too complicated. Such a plan could include everything from establishing trust accounts and naming trustees, to decision making about their waning days. At first, they may consider this subject morbid or unsettling, but most clients eventually feel empowered through making decisions to prepare for the inevitable end.

Assistance with charitable giving. The financial crisis has dimmed the retirement expectations for more than a few older investors, with many retirees content just to generate enough investment income to cover monthly expenses without having to touch their principal. However, there will always be affluent and high net worth clients who will want to continue to build their legacies by donating to causes near to their hearts. Applying tax-advantageous strategies to help aging clients reach their charitable giving and legacy aspirations should be a fundamental component of any practice.

The coming decades will have their share of opportunities as well as challenges for the financial advisor community. Advisors who take on a truly holistic role with their aging clients may find themselves nicely ahead of the pack in building their businesses by providing exceptional support when it's needed the most.


Richard Whitworth is the managing director of Business Consulting at Cetera Financial Group (, a leading network of independent broker/dealers.

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