Staying Focused
Clients’ energy for retirement savings may flag during decades of accumu- lation. Help them keep their eyes on
this distant goal.
Retirement is best described as a marathon. It’s a long distance endeavor that tests
stamina and strength. And like a marathon,
participants can sometimes hit rough patches
along the way that may make them want to
give up before reaching their goal.
Getting clients to stay focused on this
long-distance feat is one of an advisor’s most
challenging undertakings, requiring creative
strategies and training sessions.
money conflicts
For Darryl and Dani Meyerovitz of Finan-
cial Planning Associates, a wealth manage-
ment firm based in Dallas, TX., the key is to
impress upon their clients the urgency that
retirement entails, even if it’s decades away.
Far too often, clients don’t see the urgency
until it’s too late. “Some time around the
60th birthday, it kicks in,” Darryl Meyerovitz
explained. “It’s around the time that their
kids have finished college and are relatively
settled and then they think they have the abil-
ity to save. That’s a little too late.”
The Meyerovitzes—a father and son part-
nership—believe that the obstacle to staying
focused on retirement for many is a conflict
between different demands on their money.
It’s hard for many to carve out a portion for
retirement when there’s also the cost of rais-
ing a family, paying for college or even set-
tling credit card debt.
“The conflict that people have is nor-
mally resolved through compromise,” said
Darryl Meyerovitz, Founder and President
of the firm. “Once they get perspective on
the problem, they’re able to take action much
more readily.”
Instead of compromise, which might
mean foregoing retirement savings for some
time, the team recommends keeping at least
some allocation for retirement, no matter
how small. “If they have something still go-
ing, they’re not reneging on themselves, and
it’s much easier to then start saving more,”
he said.
The Meyerovitzes have gone so far as to
take some clients around to two different retirement homes: one, a well-groomed community with attentive staff, the other, a more
utilitarian facility. The visual underscores
how different retirement realities can be, and
how saving makes the difference between
the two.
A matter of language
Some advisors use games to drive the point
of retirement savings home. Jeffrey G. West
of the Financial Compass Group LLC, a
financial professional affiliated with AXA
Advisors in Wellesley, Mass., illustrates savings through the use of shoeboxes.
For clients who like to shop for shoes, he
puts them to another use. He asks these clients
to bring him four shoeboxes, which he turns
into budget boxes. One box is for necessities,
one is for discretionary spending, a third is
“I ask them, ‘Do
you want to
save first and
spend later, or
spend first and
save later?’”
— Jeffrey G. West
The Financial
for savings and the fourth is for the next pair
of shoes.
He steers conversations away from saving and toward spending because clients are
more familiar with that concept.
“Saving is just deferred spending,” West
said. “So I ask them, “Do you want to save
first and spend later, or spend first and save
later?’” And when he talks about investing,
he calls it “spending on investing.” West believes that when savings is talked about as
another part of a client’s spending habit, it’s
viewed more favorably.
In fact, West doesn’t use the word retirement much at all. Instead, he refers to that
time in a client’s life as “the future.”
“I ask them, ‘What do you imagine your
future to look like?’ I ask them to paint a
picture,” he said.
Having a well-defined picture in their
minds makes it easier to focus on the long
term. Next, West talks to his clients about
risk. He defines risk not just in how they position their portfolios, but also the risk associated with their own saving and spending
behaviors.
The dangers of inflation
For Louis Papa, Vice President and Director of Investment Strategies at Penn Liberty
Bank, the strategy that works best is using
illustrations showing the effects of inflation
over time. In order to provide a secure retirement, clients must save not only enough to
fund today’s lifestyle, but also keep an eye on
being able to do so well into the future.
“I show them a very scary chart about
what the value of the dollar bought 20 years
ago and what it buys today,” Papa said.
Papa finds that the best time to engage
clients in retirement saving is a few years
into their careers, when they’ve had time to
get their financial bearings. “That’s when
they start to get it,” he said.
Papa has found a silver lining in today’s
economic uncertainty. Clients are more
receptive to messages about saving for the
future. “Frugality is now chic,” he said. “And
that trend is only getting stronger.” •
