Planning for the Merely Well-To-Do Baby BoomerPlanning for the Merely Well-To-Do Baby Boomer
The gap between what they need and what advisors offer is widening.
February 26, 2025
In “Alleviating the Anxiety of the Merely Well-to-Do Boomer” and other articles, I wrote about several concerns that, as far as I can tell, are becoming ever more concerning to this group of prospects and clients who, though not rich, have more than enough income and net worth to be of interest to most advisors. In one conversation after another with these individuals and couples, I hear the same refrain about these topics, among others.
Memorandum of Instructions
“We’ve been talking about doing one of these for years but just can’t get to it or get someone to help us. Meanwhile, we’re getting older and our affairs keep getting more complicated. Help!” This is the one document that will bring a much-needed semblance of order from stressful chaos when a spouse dies. It’s also an engagement that holds its own set of opportunities for those advisors willing to curate a template for the memorandum and then have the conversations.
Estate Planning
I’m constantly amazed by how many Boomers who truly need a comprehensive estate plan don’t have one, if they have a plan at all. While they have myriad reasons for not getting around to it, here’s my take on some root causes for their inaction:
The messaging from the estate planning community isn’t resonating with them. The missives, articles and advertisements about estate planning, whether from estate planners, wealth managers, trust companies or life insurance agents, too often focus primarily on estate taxes and legacy planning, two topics of little interest to them and, maybe soon, to a lot of other people.
They don’t understand or appreciate the cascading set of legal and economic risks and administrative burdens associated with loss of capacity. Nor do they understand and appreciate how effectively a comprehensive estate plan can mitigate those risks and reduce those burdens. Therefore, they have no sense of urgency to plan. Of course, the emphasis on taxes and legacy hardly instills one.
Despite all that’s written about trusts, they don’t understand them. More particularly, they don’t understand how trusts can work for them now, let alone in the future. They have no clue, but many misconceptions, about why, how and when to engage a professional trustee, how professional trustees work and what they do for them and their families, how trustees charge and, of course, how to interview and select a trustee in the first place. I’ve found that these messaging problems can be addressed by better communication between the trust companies’ marketing departments and their trust officers and wealth managers. Though in some cases, the problem isn’t just the messaging. It’s also the service platform itself that needs work.
“We’re very happy with our investment advisory firm, but they’re not a trust company and don’t appear to have an affiliation with one. We’d like to put our holdings in trust with a trust company now to handle administration and the usual trustee’s duties but still have our investment advisor and not the trustee run the money. Is this possible? How would the trustee charge in this kind of bifurcated arrangement?
Life Insurance
Should they treasure, toss or tweak their policies? They’d welcome advice, but it seems that everyone offering to “review” their policies is really just interested in replacing or selling them. Some adjustments to the messaging here could be helpful, with more emphasis on why a given policy should be treasured or how a policy can simply be tweaked for retention. Of course, agents whose objective is to replace or sell the policy will disregard this particular message.
Elder Care Planning
This is the great abyss. Clients perceive the journey from living independently today to living dependently tomorrow as potentially perilous and uncertain, both strategically and economically. They know the issues and follow the developments in the elder care business. But they don’t know where to find guidance and resources to deal with the myriad issues a changing environment presents.
One widespread concern that falls into both the elder care and trust discussions involves advanced directives. The problem isn’t that individuals don’t know that they should have the directives. The problem is that, for one reason or another, they have no one to designate as an agent or successor to their spouse or child. Trustees can be most helpful here, but again, that valuable aspect of their service offering is too often missing from their messaging.
Sense of Urgency
These individuals need guidance and, in many cases, products and services…now. And they’re certainly willing to pay for them. Advisors who are willing to expand their business models and service offerings to accommodate the needs and concerns of this demographic and, where appropriate, revise their messaging accordingly will be very happy they did. Indeed, today’s political climate and tax discourse might give them their own sense of urgency.
About the Author
You May Also Like
