Not enough work is being done to help clients plan for the emotional roller coaster that can happen in retirement aside from the financial planning, says an expert.A/iStockPhoto / Getty Images
Advisors pride themselves on helping clients build and maintain wealth in retirement, including navigating financial volatility such as market corrections, inflation and tax changes. Yet, not enough work is being done to help clients plan for the emotional roller coaster that can happen in retirement.
That’s the message from Susan Latremoille, co-founder of the Next Chapter Lifestyle Advisors in Toronto and former director, wealth management, and wealth advisor with the Latremoille Begg Group at Richardson GMP Ltd. in Toronto.
In her 30-plus year career on Bay Street, Ms. Latremoille saw many successful professionals who were elated in their early retirement years but then became bored and unhappy after too much leisure time.
She says many clients didn’t have a clear enough picture of how they would spend their time in the long term.
“People often have an unrealistic view of retirement, a Hollywood version, and they struggle [with the real thing],” Ms. Latremoille says. “Advisors often don’t have an appreciation for that because people never like to admit they’re not happy with the dream that’s painted for them.”
Indeed, that’s why she co-founded Next Chapter Lifestyle Advisors – to help financial advisors work through the non-financial issues that can come up in retirement with their clients.
The training and coaching business, which she started a year ago with certified retirement and relationship coach Marianne Oehser, includes in-depth self-assessment tools that help people gain more self-knowledge and clarity about what a successful retirement could look like – whether it’s going back to work part- or full-time or finding some other purposeful non-working activities.
“It’s not enough for a financial advisor to just say to the client, ‘So, what do you want to do when you retire?’” she says. “The real key to figuring out what you should be doing is to know yourself deeply.”
Ms. Latremoille and her team launched the new Next Chapter Lifestyle Advisors Program in November to help advisors and their clients design and build a “Happiness Portfolio for Retirement.” Similar to a financial portfolio, this is a plan for how to invest what she describes as “the other most valuable asset of time” to help ensure a fulfilling retirement.
The advisor program includes different engagement options, such as live client-facing webinars and training in the use of tools such as a scorecard that help them deepen conversations about a client’s non-financial lifestyle plan.
If the person isn’t happy, all of the money in the world doesn’t mean anything.
— Diana Orlic, Richardson Wealth
Ms. Latremoille says the annual subscription model includes support calls to answer questions about retirement and the ongoing provision of resources such as content for newsletters and educational guides for clients.
She says advisors are well-positioned to prompt this thinking among clients, especially given the convergence between the wealth management industry needing to be more holistic, clients needing help with their transition to retirement, and advisors seeking to add more value and distinguish themselves amid increased industry competition.
Ms. Latremoille points to an Invesco Ltd. survey that shows 56 per cent of investor respondents view advisors as their number one source for retirement information.
“It’s not a stretch for people to talk to their advisors about this [topic],” she says. “And when we look at the advisor situation, they really have to step up the service offering if they’re going to keep their fees up, maintain loyalty and attract new clients.”
In fact, more advisors south of the border are focusing on the psychological side of retirement. A 2020 study by U.S.-based Equitable Holdings and InvestmentNews Research shows that three in four advisors surveyed believe conversations about emotional and mental well-being with clients will increase while more than two in three believe they’ll be having more conversations about life goals over the next five years.
In addition, a recent Edward Jones and Age Wave survey from the U.S. shows more than three-quarters of people planning to retire wish there were more resources available to help them plan for an ideal retirement beyond just their finances.
“Clients benefit tremendously from this,” Ms. Latremoille says of non-financial retirement planning. “They feel better, which can improve relationships with friends and loved ones, and they are more engaged in life.”
Developing more impactful planning
Diana Orlic, director, wealth management, portfolio manager, and investment advisor with The Orlic Harding Cooke Wealth Management Group at Richardson Wealth Ltd. in Burlington, Ont., says a growing need for non-financial retirement planning. She has seen many retirees become unhappy – even depressed – because of the change in lifestyle and social status in retirement.
She says advisors are often afraid to ask clients too many personal questions that aren’t tied to financial goals, but that having a professional program like Next Chapter Lifestyle Advisors is offering can help open the door to developing more impactful planning.
“If [a client] doesn’t know what to do with their time, and it’s going to make them unhappy, we need to work on that,” she says. “If the person isn’t happy, all of the money in the world doesn’t mean anything.”
Ms. Orlic also advocates for clients to involve their loved ones in the non-financial lifestyle conversation with advisors to get a fuller picture of what retirement could look like.
“The more you can uncover, the more successful you’ll be. Some of the most successful families we have are multi-generational; they all come to the table,” she says. “But sometimes it takes coaching or facilitating to be able to bring everybody together and sometimes it means having tough conversations.”
Tiffany Harding, vice-president and head of wealth planning at Gluskin Sheff + Associates Inc. in Toronto, also believes non-financial retirement planning will become a larger part of an advisor’s role in the future. While her firm isn’t a client of Next Advisors Lifestyle Advisors, she likes the approach.
“[Ms. Latremoille] doesn’t lead with the numbers. Instead, she does these assessments to do a deep dive on the individual’s values, vision and mission, and says, ‘This is what it looks like. And now here are the numbers at the end,’” Ms. Harding says.
She says she expects more advisors to adopt this type of non-financial service offering, particularly as the baby boomer generation retires in greater numbers and life expectancies increase, leading to longer retirements.
“The industry, as a whole, is well versed in preparing retirement plans, calculations, financial plans and having conversations about those,” Ms. Harding says. “But, we’re not necessarily trained on the emotional aspects and how to guide clients for a 25-year period on what this next chapter looks like beyond the numbers.”
Advisors have to seek that training, she adds.
“It’s important to talk to [clients], ‘What does that retirement really look like to you, beyond the numbers?’” she says. ‘“What do you feel will give you purpose?’”