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Having difficult, if not awkward, conversations with clients is a big part of an advisor’s job to fine-tune financial plans to meet their needs.
However, discussions around aging and end-of-life planning can be even more taxing because it forces clients to consider morbid events and how to safeguard against unforeseen and unfortunate circumstances.
Globe Advisor editor Pablo Fuchs spoke with Mallory McGrath, founder and chief executive officer of Viive Planning, about what issues need to be brought up as part of this process and the major considerations involved in this type of planning.
What are some things advisors could be doing to have a greater impact when discussing these topics with their clients?
If you can’t have this conversation with yourself about your own life, then there’s no way a client’s going to take you seriously and be able to have that conversation with you about their life. If we’re going to provide a very well-rounded service to clients, we need to be practising what we preach.
I can answer any question that I pose to a client when they throw it back at me, which happens a lot. I’m ready with the answer to what I would do in my life. That’s really the first step for advisors. You need to be comfortable talking about this with yourself and then possibly with your spouse and then potentially your own family. Because if you can’t facilitate that conversation in your own household, then it’s going to be pretty hard to do it with a client with whom you don’t have the same level of intimacy.
It’s [also] key to recognize that this isn’t necessarily a one-time conversation. There are times when I’m doing two, three, four, five meetings with the client before I get to that final answer, which, quite frankly, could change 10 years from now, depending on the client. A large level of patience is required because you’re asking your clients to divulge truly intimate beliefs for their future.
What are the issues advisors and clients overlook when planning for this life stage?
Retirement is a very loaded word in that it’s that time after you work when you get to travel, do the snowbird thing in Florida, and live up at the cottage more than you did before. That sounds wonderful. But what happens when it’s too hard for you to travel because you need a hip replacement or when early-onset Alzheimer’s kicks in.
These are things that a lot of times advisors are not touching on because these are very emotional topics. They’re also medical topics. A lot of times we think to stay in our lane. I talk about money, this is what I do, and doctors talk about medical things. But we need to find a way to tie these together seamlessly.
Money and aging are very closely tied together because if a client finds out they have Alzheimer’s at the age of 70, they could live another 20 years as this is a deteriorating disease. That’s going to require so much care, not only for them but potentially for their spouse as it will affect their aging process.
You need to think about the medical implications of aging and correlate them with the financial implications.
When you give a financial plan, are you taking into account the cost of living 24-7 with a personal support worker in the home? Are you taking into account the cost of living in a retirement home and then assisted living home and then a long-term care home? Are you taking into account the fact that most people want to age in place, and the costs associated with that? A lot of times advisors aren’t talking about it, even though they know they probably should.
This interview has been edited and condensed. The entire interview can be viewed here.
- Globe Advisor staff
Must-reads from Globe Advisor this week
What to consider when leaving Canada to live or work elsewhere
Canadians who sever ties with the country are automatically considered to have sold certain types of property such as shares, valuable artwork and foreign property even if they haven’t actually been sold, based on fair market value. The Canada Revenue Agency considers it a deemed disposition and emigrants may also have to report a capital gain, known as a departure tax. Brenda Bouw breaks down the process that advisors need to review with clients considering such a move.
What to watch out for when clients face dementia
Few situations must be handled as delicately as when an advisor is facing the cognitive decline of an aging client. As the rate of intergenerational asset transfers speeds up, advisors are increasingly encountering financial decision-makers in the early stages of dementia. Barbara Balfour looks at how advisors can identify if a client is experiencing dementia and what safeguards to put in place to protect them.
How important is tax planning in advisory practices?
While most advisors are not accountants, they still need to have a fundamental understanding of taxation and how it affects a client’s overall finances. But how comprehensive should the tax portion of an advisor’s practice be? Helen Burnett-Nichols speaks to advisors about their approaches to tax planning for clients and how beneficial it can be.
When financial advice is a family affair – lessons from dads
Fathers in the business have provided valuable mentorship and connections for younger advisors in an industry that is all about personal relationships. For some, support from their dads has been a necessity for their professional survival. Jameson Berkow speaks to advisors that have taken over from their fathers or received guidance from them in their careers.
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The CFA – Wall Street’s toughest qualification – struggles to regain stature
U.S. gas heartland woos foreign buyers as Europe’s energy crisis deepens
Passive investing has increased U.S. stock volatility, study finds
ESG’s legal showdown: ‘There’s nothing to suggest DWS is a one-off’
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Renters are saving hundreds over homeowners
Soaring mortgage rates have blown up a foundational argument for owning a home versus renting. No longer is a monthly mortgage payment comparable to the cost of renting a place. Renters, even in expensive urban markets, are saving hundreds of dollars over owning. And as interest rates rise, renting is getting to be a lot less of a burden than paying a mortgage. Rob Carrick breaks down a lot of popular assumptions about housing that are falling apart right now.
More pain ahead for crypto as investors rush for exits
Cryptocurrencies are in free fall. One of the world’s largest crypto exchanges is cutting almost a fifth of its workforce and a major crypto lender is halting all withdrawals and transactions for its customers, citing “extreme market conditions.” Many crypto heavyweights, including several companies in Canada, are left to grapple with the current downturn – wondering how far crypto will fall and which firms will be hit. Temur Durrani reports on the problems ahead even as some remain bullish on the market.
- Globe Advisor Staff