Helping older, vulnerable clients

The second concern is equally fundamental: what to do if they can’t manage their own money.

To address each issue, Harvey starts with the basics and builds from there. He asks senior clients what they need, what they want out of retirement and what they want their estate to do. He also emphasizes the need for both a power of attorney (of which he requests a copy) and a will.

As clients enter their late 70s and early 80s, Harvey asks to meet with their adult children in order to understand the family’s expectations and financial awareness better. “[Seniors] are really reticent about this,” Harvey says. “They think it means they can’t take care of themselves. They want to prove they’re self-reliant, and they also want to keep their finances to themselves.”

There also is concern the kids will want money, especially if they have a better understanding of their parents’ finances. “I reassure clients the children cannot get the money,” Harvey says. To reassure clients is a key role for advisors working with seniors, he adds: “I become their ‘Linus blanket.’ My job is to keep them comfortable. I can try to alleviate their worry about money.”

Harvey, a professional accountant by training, decided in 1992 to forge a new career path. “I wanted to stop managing people and help people manage their lives,” he says.

Financial planning and advising was an appealing route to achieving that goal. Harvey knew people in the financial advisory field and had insight into their work, but he knew establishing a client base from scratch would be a challenge.

Being a certified general accountant (CGA) helped to build trust – and a robust client base. Today, Harvey works with more than 150 families and oversees five additional advisors in his IPC branch, which is called Planning Your Peace of Mind. Many of Harvey’s clients want to take advantage of his experience as a CGA. “They ask me a lot more tax questions,” he says. “I don’t mind.”

Since making the transition, Harvey’s accomplishments as an advisor have not gone unnoticed. In 2011, Harvey, a certified financial planner, became one of the first planners to be recognized as a fellow by the Financial Planning Standards Council. And he recently received the 2015 Best Client Experience Award from IPC.

For Harvey, formerly an instructor within the CGA program at the University of Ottawa, tax questions posed by clients may be some of the easier ones to answer. Issues facing seniors often are thorny and delicate. Take longevity, for example. The earlier you have a discussion with your clients about lifespan, the easier that discussion will be, says Harvey: “Do that early – in their 50s.”

Harvey inquires about his clients’ parents, their health and the age at which they died. He also asks his clients to assume they’re going to live well into their 90s. What would they do and how would they pay their bills? “You need to do the planning for that,” says Harvey, whose older clients range in age from 50 to 94. (The oldest is a woman he has worked with since she was a “young lady” in her 70s.)

Facing reality may not be easy for clients, Harvey adds: “It’s a big adjustment. Today, people want to retire early, but they need to be able to live the lifestyle they want for their remaining years.”

Harvey believes in being open and honest with his clients. (He is a fan of the second phase of the client relationship model, which he calls “fabulous.”) He has frank discussions with clients who are considering retirement and may be eager to leave the nine-to-five work world behind them. That is not always the best option, Harvey notes. Clients need to have a clear vision of what retirement will look like without a full-time income.

“The problem with golf is if you play Monday to Friday, that’s called a job and it pays lousy,” he says. “Staying home doing nothing is not costly, but you’re bored out of your mind.”

Difficult conversations are par for the course, Harvey says. He talks frankly with his clients about their plans for the future and the reality of those plans. He asks clients to contemplate one fundamental scenario: “One day, you’re going to stop making money. How will you live then?” The answer to that question may be working longer than originally anticipated.

A financial plan is the vehicle to enable clients to do that. Harvey’s relationships with new clients begin with a conversation about almost everything but portfolio management. “I don’t talk about rates of return [in the first meeting],” Harvey says. “I ask them where their kids are now.”

Focus on the person first, Harvey says. He has two or three conversations with each new client before starting to deal with the nitty-gritty of products, investments and portfolio returns.

As an advisor and an accountant, Harvey also understands the importance of tax planning for clients and their beneficiaries. “They don’t think the [Canada Revenue Agency] has any access to their money [after they die],” he says. “We discuss strategies to keep this to a minimum.”

Another tricky conversation – and situation – involves capacity. As clients age, some will not have the mental aptitude to make important financial decisions. “Always engage the power of attorney when there is a concern,” Harvey says. “Sometimes, a client can be lucid; other days, not.”

Family matters also can be troublesome. Lending money to children, for example, can open Pandora’s box, which is safest left unopened. “Loans to kids scare me,” he says. “I really discourage the client from doing that unless the child talks to me.”

For Harvey, going that extra distance is part of providing service to senior clients. “They are the most vulnerable community,” Harvey says. “I have to protect them.

DISCOVER HOW YOUR CLIENT IS

Ron Harvey, senior financial advisor with Investment Planning Counsel Inc. in Ottawa, has a large proportion of elderly clients in his book of business. He offers the following tips for helping seniors:

– Focus on clients, not products

“Our industry is not built on products,” Harvey says. “It is built on clients’ trust and dreams.”

Discover who your client is, he says, and find out what is important to them.

– Build trust

Don’t expect prospective clients to trust you right away. You have to earn their trust through a series of conversations. “Trust doesn’t just happen,” Harvey says, “[just] because you say you’re an advisor.”

– Listen to the client

The key to understanding your clients is listening, says Harvey: “That’s the hardest thing for young advisors who want to share what they’ve learned in their last mutual fund course.”

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