Retirement Planning Must Include Soft Skills

Today’s wealth managers and financial advisors are being called upon to offer their clients a more holistic approach to retirement - one that encourages exploration and direction beyond money-related questions. That’s important.

Pension plans, RRSPs, estate plans and IPPs are only one side of retirement planning. But what about a retiree’s shrinking social network and the possibility of loneliness or depression?

For the next eight years, boomers will be leaving the workforce en masse at the rate, in Canada, of about 1000 per day. Financial advisors and wealth managers will not only need to help their senior clients obtain financial security, they will also be called upon to help them adjust to the unique lifestyle changes associated with transitioning from work to retirement.

Research shows that over 80 per cent of today’s boomers do not have any sort of retirement coach or mentor, and many are looking to their financial advisor to provide leadership in that area. As an advisor, you’re in a unique position to assist clients to prepare for retirement. You can help them get it right!

Yet, a question I’m often asked is: “As an advisor, where do I start?”

Whether you use books, articles, workshops or other bridging techniques, clients should be encouraged to create a retirement vision. You may ask, how detailed does a vision need to be? It can be elaborate or fairly straightforward and basic. Here’s an example of a vision created by Bill:

“I envision myself continuing in my trade but working only two days a week. My wife and I are having fun together, attending auctions and concerts, and traveling. I am spending approximately one day a week doing volunteer work. I see myself skating twice a week in the winter and golfing once a week during the warmer months. I am eating healthy meals and exercising regularly. I envision my wife and I spending about 20% of our time with our children and grandchildren.”

Bill has a clear and balanced vision. It is brief and understandable. Obviously with each envisioned action there needs to be subsets. (for example, what he’s doing to ensure healthy eating and regularly exercising).

What you don’t want is for a client to create a vague retirement vision, like Grace’s:

“I don’t know. All I know is that I’ll be able to spend more time on housework. Plus I’ll be able to watch the ‘soaps’ I’ve missed when at work.”

Without a carefully formed vision, Grace will be doing housework and watching the “soaps” six months from now and possibly six years from now. Grace’s inadequate vision isn’t going to provide her with distinct actions and plans on which future decisions can be hinged.

Advisors who assist clients in preparing their retirement vision report several benefits, including the development of a more in-depth client/advisor relationship. Now that’s a unique way to add significant value to your relationship with your clients.

Rick Atkinson is an expert in holistic retirement planning and bestselling author of Strategies for Retiring Right!

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