In today’s competitive world, attracting new clients requires that you clearly differentiate yourself.

One way to do that is to address today’s No. 1 concern among many investors approaching retirement and in retirement: “Will I run out of money?”

Research by U.S. fund giant Blackrock Inc. has shown that 70% of Americans would be willing to move their accounts if another firm or advisor offered expertise in constructing portfolios to avoid running out of money.

As an advisor, you need to do two things to capitalize on this opportunity.

First, you may need to ramp up your expertise around financial planning issues such as sustainable withdrawal rates and the range of available solutions for retirement income. And, second, having developed your expertise, you then need to get the word out.



> The Role Of Financial Planning

In some cases, the first step is to increase your commitment to the financial planning process.

Many industry experts believe that you can’t really create an accurate investment plan without getting into some financial planning. And if that’s true of an investment plan, it’s doubly true of a retirement plan.

The reason is simple: the essence of a financial plan is that it clarifies options and enables intelligent trade-offs between goals.

In light of the recent market downturn, some of your clients believe they’re worse off than they actually are; they think they’ll be eating cat food, when in fact they will be just fine. The only way to demonstrate that is to walk them through the numbers.

Other clients suffer from the opposite problem. They are not going to be able to reach their retirement goals — they won’t be able to retire when they want, or how they want — with the level of risk they want in their portfolios.

A financial plan clarifies the available options and trade-offs and makes it possible to identify which goals can be achieved and which have to be sacrificed. It also leads to a conversation about lifespans. If you’re talking to a typical 65-year-old couple, they need to plan to fund expenses to age 95 or older. In some cases, this also leads to discussion about long-term care insurance.



> Retirement-Income Options

Recently, while conducting interviews with retirement-income experts, I was struck by the topic’s complexity, which is often tax-driven. Advisors need to get a handle on issues such as pension-splitting, the role of back-to-back annuities, the impact of starting to take Canada Pension Plan benefits at various ages, reallocating income between spouses through vehicles such as spousal loans, and avoiding clawbacks on government programs such as old-age security.

Another key conversation relates to the percentage of savings that can be withdrawn each year so that retirees won’t run out of money. Withdrawal rates are one of the biggest decisions your clients will make.

You also need to address the risks of a stock-market downturn in early retirement and develop a good understanding of some of the recent product innovations to address this “sequence of returns” issue.

You have to get into estate-planning issues, such as minimizing capital gains on family cottages and charitable-giving strategies.

Finally, you need a solid grasp of the product solutions available for retirement income, including annuities and investments, that will provide tax-efficient return of capital.



> Getting The Word Out To Prospects

The last piece of the puzzle is getting the story out to prospects. Some of the strategies that have produced results for advisors include starting with existing clients. Begin by making retirement-income planning a focal point of your regular communications to existing clients. You can do this through information on your website, newsletters and articles you send clients, as well as through conference calls and client workshops.

Another tactic is to invite clients approaching retirement to luncheon workshops in your boardroom on the topic of creating a road map to a secure retirement. Over sandwiches, you deliver to interested clients a 30-minute talk on the elements of an effective retirement plan and then open the floor to questions.

By using these methods, you will not only serve clients concerned about retirement income better; you’ll give yourself ammunition to use when talking to prospects.



> Reach Out To Prospects

Once you’ve begun a stream of regular communications to clients on retirement-income issues, you have an opportunity to leverage that with prospective clients.

One advisor carves out 90 minutes every Friday morning to call people he knows, with the goal of getting permission from at least three to five people to add them to the distribution list for the information he sends.

His approach is simple: “Many Canadians are concerned about having enough money in retirement. Every two months, I send interested clients updates with new research, articles and information on planning for retirement. I’ve had a great response, and I am calling because it occurred to me that you might be interested in this as well.”

Or, if you’re conducting those sandwich workshops on creating a retirement road map, you could have the goal of getting eight clients and three or four prospects into each session.

When talking to prospective clients, you could say: “Many people are concerned about running out of money in retirement. On Friday, January 29, I’m hosting a lunchtime workshop in my boardroom for some clients on the subject of creating a road map to a secure retirement. This is primarily for existing clients, but I do have a spot available if you’d like to sit in. The workshop runs from 12:30 to 1:30 p.m. at my offices at 123 Main Street.”



> Seeking Out Speaking Opportunities

Another strategy is to seek out opportunities to speak to centres of influence or groups of people that are approaching and in retirement.

After putting together a presentation, one advisor got a directory of organizations in his city and emailed the program chair of likely organizations with an offer to deliver a talk, following up by phone about a week later.

In the first year, he spoke to 25 groups ranging in size from 10 to 300; in every case, he offered a draw for a book on retirement planning, with a space on the ballot for people to tick off if they’d like to receive his monthly e-newsletter on retirement planning.

This paid real dividends when he hired a summer student to call the people who had been receiving his e-newsletter, asking if they’d like to schedule a meeting. Just emailing newsletters isn’t enough; after building credibility through the material you send, you need to pick up the phone and ask for a meeting.



> Boost Credibility Through The Media

Another approach is to write articles about retirement planning issues and contact local publications about publishing them. If you’re unsure about your ability as a writer, hire a freelance journalist to edit your work.

Just remember that a one-off article — or even a series of articles — won’t typically lead to calls from prospective clients. What those articles do, though, is raise your credibility when talking to prospective clients, especially if you’re trying to get in the door to do workshops for local accounting and law firms.

Finally, if your firm allows it, you could seek out opportunities to be interviewed on retirement issues in newspapers and on radio and TV. Every community needs a local expert on important topics. Consider investing the time and effort to position yourself as the go-to resource for retirement planning.



> The Role Of Patience

The last step is to make this happen. One approach is to devote half a day — say, Friday mornings — to building your profile as a retirement expert. Positioning yourself as such an expert won’t happen overnight. Chances are you will see some early results, but it is likely to take at least a year and more likely 18 to 24 months before you really start seeing strong returns.

The fact that you have to be patient for this to work is actually a good thing — if it was quick and easy, every advisor would do it, and those prepared to invest the time and effort to gain the “retirement expert” positioning wouldn’t have a competitive advantage. IE