Monday, November 29, 2021

Add Value by Discussing Encore Careers With Clients

Start the conversation early and use tools that help identify their thoughts and feelings about work.

The Coronavirus crisis has been a turning point for many people, with 76% of Americans crediting the pandemic with forcing them to “refocus on what’s most important in life.” This sentiment holds true across age, gender, race/ethnicity, income and region of the country. One option that has long been enthusiastically embraced by some of our clients, and magnified by the pandemic, is to begin an “encore career.” It also presents a planning opportunity as we work with our clients.

Wikipedia defines an encore career as work in the second half of life that combines continued income, greater personal meaning, and social impact. The vision of a retirement lifestyle filled with hobbies, leisure, and time with grandkids is a big accomplishment. However, some clients are looking for a different form of meaning and purpose in retirement while finding ways to use their gifts and talents. Studies also show that those with a higher sense of purpose have better overall health, greater cognitive functioning, higher life satisfaction, increased mobility/functioning and longer life spans.

Supporting Clients’ Goals

Some clients view success as setting and then achieving their retirement goals. Although many clients are happy to leave their careers and downshift into a comfortable retirement, other options may be equally appealing to your clients. Proactively helping clients plan for the future — even if they shift course and unexpectedly decide to build an encore career  — can help advisors successfully maintain a long-term relationship with those clients.

The key to laying the foundation for an encore career is to start early and recognize the opportunity to incorporate this version of retirement into financial planning. It is important to note that encore careers can happen mid-career just as easily as making a switch at the end of a successful career.  Here are some steps to take, no matter how old your clients are.

Start Early

Opening the conversation early about encore careers creates more potential to shift finances for future job training or increase savings now for a future career that pays a lot less but offers more personal reward.

It also provides more time to shift current spending and right-size spending for future income changes. This could mean a potential home sale or move to better fit lifestyle needs. The key is to recognize the opportunity and the role that we can play in helping our clients design their encore career with alignment to their overall finances.

Starting the conversation about encore careers also creates more flexibility throughout the planning relationship. Life events and transitions can have a big influence on how clients view their life in retirement. An important aspect of the COVID pandemic has been the dramatic loss of life, which has influenced many people to seek ways to proactively support their communities or organizations that align with their personal values.

Clients who have been introduced to the concept of an encore career will be in a better situation to effectively evaluate this type of environment and determine if now is the right time to pivot their career to a new direction.

Open the Conversation

We use a tool from Money Quotient called the Wheel of Life that opens the conversation and helps our clients assess their level of satisfaction in each area of life including Family, Health, Leisure, Learning, Inner Growth, Home, Community, Work, and Finances. The client plots their level of satisfaction in each of these facets of life with 10 being the highest satisfaction.

Once a client has completed the Wheel of Life, you can initiate conversations that include questions about whether or not their life is in balance and explore areas where they might want to increase their satisfaction. This is a perfect opportunity to gain an overall understanding of the client and also identify their thoughts and feelings toward work.

For example, a client with low job satisfaction might not last in their career until the planned age of 65. This happened with one of our clients who was an IT Specialist and decided to switch career directions to become a doctor in his mid 30s after some reflection on his career satisfaction.

The tool also identifies other areas where clients have high satisfaction that could expose potential opportunities to combine inner growth with work. One of our clients felt a great connection working with a non-profit that helped girls and youth; she decided to leave the corporate world and now is the executive director of this non-profit. The Wheel of Life is a great tool to use in the beginning of a client relationship and as a check-in throughout the client relationship.

Additional Reading: Clients’ Second Acts Follow National Post-Retirement Trend 

Identify Key Life Events

Transitions such as an inheritance, divorce or even a job loss can create an excellent opportunity for reflection and action. I have worked with several clients who have received an inheritance that was a surprise and greater than expected. In one case, the client used this opportunity to retire early as a teacher and use her skills to work part-time and volunteer in the classroom a couple days a week. The client was still working with kids but giving herself more flexibility to travel and enjoy her hobbies.

I have also had clients reflect on their life following a divorce. They decided to use the support of temporary spousal maintenance to retrain and explore other career opportunities. One client started a jewelry business during the transition time after her divorce. She took classes, learned how to market her business, set up an online account, and connected with others who had success in this industry.

Nothing beats the joy you see in helping clients connect to their passion and purpose.

Kathy Longo, CFP, CAP, CDFA, is president and founder of Flourish Wealth Management. She can be reached at hello@kathylongo.com.

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