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Business Development How to help your clients plan for their ‘second acts’

How to help your clients plan for their ‘second acts’

A key focus of IFAs is on doing retirement planning for their clients. But what if your client is not planning to retire?
Team Cafemutual Jan 6, 2018

A decision to work after retirement is based on personal values. Clients sometimes want to switch their careers and begin a new venture that brings rewards, both financial and emotional. Here’s how you can help them build their second acts.

Understand the rationale behind their choice

Advisors should be acquainted with the context and thoughts behind their client’s choice. To understand it better, they can ask a few sample questions like these.

  • What do you value most about the idea of taking up a second act?
  • What must happen for your career transition to be successful?
  • How will you define success from a financial perspective?

The questions should cover the various details regarding income requirements, expected rate of return, time horizon, liquidity needs, tax restrictions and liabilities, and unique preferences. The responses will help as points of reference for the future financial planning discussion and helps determine the client’s optimal portfolio asset mix.

Prepare for the worst case scenario

Scenario planning is an essential requirement when someone is looking to switch their career or take up entrepreneurship. What if your clients do what they love and money does not follow? As clients need to have alternate sources of funding to support them during difficult times, you need to plan their finances carefully.

Be their cheer leader

The ‘second act’ conversation requires advisers to tap into their clients’ emotional lives. Even when fully engaged and passionate about making big life and career changes, many individuals may feel that they have not planned it perfectly. This can lead to indecision, and nothing great emerges from that state.

For such ‘perfectionist’ personality individuals, an adviser can help by acting as a cheerleader. Provided, that the adviser feels that Plan B can be incorporated and is reasonable.

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