By the time they get into their 50s, most people start wondering if their savings are going to be enough to finance their lifestyle for the rest of their life. At some point, they may even consult a financial advisor to answer that question.
That 50-something may be willing to allow the advisor to manage their investments. As part of the engagement, the advisor completes a financial plan that does an excellent job of analyzing the client’s current assets, income and expenses. In many cases, the client gets the good news: You have enough money!
And then what?
Clients at this stage do not have a roadmap for the second half of life. Not only are people living longer, but The Great Resignation brought on by the pandemic has resulted in a lot of people leaving their jobs earlier than they planned. Many people are lucky enough to be beginning what is likely to be a decades’ long period of life of financial freedom.
But they have so many questions. What am I going to do if I am not working? Do I want to stop working? Who would hire me? Do I want to do the same sort of work? What if I can’t get a job? How do I decide where I want to live? What kind of Medicare plan should I choose? When should I take Social Security? What would I do if something happens to my spouse? How much should I set aside for my children? What about long-term care? The list goes on and on.
With investment management getting cheaper and more commoditized every day, many more financial advisors realize that they need to offer services, or access to services, that go beyond investment management. Some larger RIA firms, like The Colony Group, have added a suite of referral concierge services for clients.
Advisors Adding Value
At the same time, a lot of advisory firms big and small are exploring the idea of adding value by working with retirement coaches. Of course, some advisors have a passion for working through such major questions with clients. But for those who don’t have the time or inclination to delve into such issues, the idea of working with a retirement coach can be intriguing. Regardless of the approach, most advisors are at least thinking about how they can better serve the asset-rich group of clients who are entering their second half.
Robert Laura, founder of the Retirement Coaches Association, says succinctly: “If advisors aren’t already doing it, they are behind the curve.“
I recently caught up with Laura and some retirement coaches to find out more about what they’re doing and how they run their businesses.
Many retirement coaches were certified by an organization called Retirement Options, founded in 1989 by Dr. Richard P. Johnson and acquired in 2012 by Career Partners International. Retirement Options specializes in offering retirement-planning assessments that affiliated coaches use to help individuals determine their personal strengths and what kind of lifestyle they want to lead during their retirement years. I contacted Retirement Options to learn more about its current focus, but I did not hear back before publishing this article.
Meanwhile, Laura and members of his association are actively spreading the word about how retirement has changed and are trying to scale their service by working with financial advisors. When I was executive editor of Financial Advisor magazine, Laura came on board in 2011 as a columnist and we often talked about what people face in retirement. He was a financial advisor, but he seemed so different because he understood even then that there is so much more to retirement than money. His very first column was “The Dark Side of Retirement” — and I was hooked!
In 2017, Laura founded the Retirement Coaches Association, which offers the Certified Professional Retirement Coach (CPRC) designation. Its members include certified coaches, financial and human resource professionals, as well as others.
Just how are retirement coaches working with financial advisors? I asked three coaches I know to find out.
Working on Retainer
Pete Finlon, a longtime retirement and transition coach based in the Seattle area, acknowledges some financial advisors do try to address the retirement transition with clients. “A lot of great advisors do that intuitively; they ask those questions,” he says. “But I think that’s rare.”
Finlon, a former U.S. Marine officer, has held various sales and business development positions in his career, plus served as head coach of a community college women’s basketball team and as a board member of the Seattle Sports Commission. In recent years, he’s shifted his focus from working directly with individuals to working with six larger advisory firms on a monthly retainer plus developing retirement programs for hospitality managers.
He notes he reaches a greater audience by working with advisory firms and provides their clients with wellness, job transition, family conflict and caregiving advice. His business background and his focus on networking have helped him build a thriving retirement coaching business called Triple/Double LLC.
In a recent article he wrote for Rethinking65, Finlon noted the cookie-cutter approach to retirement is no longer working. “The big question is, what non-financial services can advisors offer and do it well?”
Partnering with An Advisor
Michael Drak, a retirement coach and author based in Canada, is also working with a financial advisor — his wife. She charges an AUM fee and provides Drak’s retirement coaching services as a value-add for GenX and baby boomer clients.
“What I provide my wife’s clients with is a retirement (longevity) lifestyle design service,” he explains. “I help them design a lifestyle that will make them happy and live longer, one they would be happy to wake up in the morning to. Many times, their chosen lifestyle will contain a work component — part-time paid work or volunteer work.”
Drak says he and his wife teach people the concept of financial independence and make that the goal rather than traditional retirement. They then use financial independence as a steppingstone to something better.
In particular, he and clients come up with a viable plan for a satisfying lifestyle by discussing their interests and skillsets. His wife ensures that the cash flow is there to support it.
Drak loves what he does and has plans to expand his reach to more people. He found his calling as a retirement coach after leaving his job in retail banking after 38 years.
“Two days after I left, I had no idea what I wanted to do or how much money I would need,” he recalls. “I had more than enough to retire. I needed to come up with something that would make me happy.”
Working with Groups
Also bringing retirement coaching to advisors is Reid Stone, CPRC, who is based in the Minneapolis area.
Stone worked in the operations side of the advisory industry for over 20 years. Now, he and another retirement coach are teaming up to help a small group of financial advisors in the Minneapolis area provide retirement coaching to their clients.
“What I’ve been doing with this group of advisors,” he says, “is helping them set up retirement coaching for their firms — helping them integrate it in their client experience for retirement.” The other coach works with the clients, and Stone helps the advisors set up the coaching program and implement it.
Stone added he is also partnering with a retirement coach in the Milwaukee area. The retirement coach will guide the advisor’s clients. Stone will do the marketing and provide content, webinars and program integration for the advisor. They also offer training to advisors on providing retirement coaching to their clients.
It hasn’t all been smooth sailing. “One thing we’ve found is that advisors are very hesitant to provide additional services like this. However, there is a lot of industry research pointing to the fact that clients are seeking this type of guidance. Coaches are seeing this first-hand. But retirement coaches don’t talk about the financial aspects. We help clients figure out what they will do in retirement and who they want to be in a phase of life that may last 30 years or more. It’s a complementary service, like an estate planning attorney or an insurance agent,” he says.
Stone adds that retirement coaches advocate that people keep working at something they really enjoy. Work, in some form, provides so many benefits — socially, mentally, and physically — to a healthy and happy retirement.
One change Stone proposes relates to how retirement is discussed. “We need to flip the retirement conversation,” he says. “Rather than first talk about how much money someone is going to need in retirement, we should first talk about what retirement looks like. What are we saving all the money for?”
Ironically, a greater number of younger financial advisors are taking that sort of approach, Stone adds. He says they’re doing a better job at exploring how a career fits with what people want out of life.