The future of advice is holistic. Learn why today’s financial professionals need to think beyond portfolios and start planning for life’s biggest transitions.

Show Notes Info:

If you’re interested in hearing more from Catherine and reading the full

report, Retirement in the USA: The Outlook of the Workforce, you can visit transamericainstitute.org.

Hi, I’m John.

And I’m Julie.

We’re the hosts of the Hartford Fund’s human-centric investing podcast.

Every other week, we’re talking with inspiring thought leaders to hear their best ideas for how you can transform your relationships with your clients.

Let’s go!

Catherine, welcome to the Human Centric Investing Podcast. We’re so happy to have you here today.

Well, thank you for having me.

Catherine, thanks for joining us. And for today’s podcast, we really wanted to have a conversation based on some of the survey and research results that you participated in, kind of how the business is changing or maybe how it might change so that financial professionals can better serve their clients and create better client outcomes. And I guess my first question to you is, so, you know, as a financial professional, I’ve been in the business many years, There’s a certain of. Expectation of what financial professionals will offer. And sometimes we as the professional have an expectation of, what’s expected and this usually revolves around the investment questions, right? What should I be investing in? Is it a good time to buy equities or bonds or all this kind of stuff? But Catherine, your experience and what you’ve seen, are there other areas where financial professionals can. Provide assistance that the clients may not be getting anywhere else?

You came to the right place. Through our research and our survey work, we see a lot of things just bubble up from the survey findings that thinks people need help with, and it doesn’t look like they’re getting that help, even if they do have a financial advisor. So this sort of opens the questions, what do people need to help with and how can advisors a line of services, and of course... It’s a given people need help with their investments because investing especially now is extremely complicated but there’s actually a broader range of services where financial advisors can be really helpful to their clients. And it may involve doing things they haven’t done before or new ways, new opportunities, but let me share with you some of the things we see. Number one, engagement in the basic. Don’t assume your client is engaged in the fundamentals of things like budgeting and basic financial planning. So a checkbook, if they’re all over it, that’s great, but if not, those budgets and those plans are the underpinnings of everything else that will come, then it’s kind of time to focus on that. Another thing is really understanding both short and long-term goals. And how to get there. And of course, it’s great to talk about retirement lifestyle and things people wanna do in retirement, but also ensure that other goals are happening there along the way. And then there are two specific areas that I think are especially vital right now. And this is where the financial advisor in some ways will turn into a career coach because we see many, many workers planning to envisioning into working to older age, both for income as well as what we call healthy aging purposes. And they may not have saved enough to be able to retire, but they need a solid plan to get there, which includes maintaining your health and what’s even harder, their employability. The role of the financial advisor in some ways is morphing into that of a career coach to encourage people if they plan to work longer and retire at an older age to focus on their health and their employability, keeping job skills up to date, keeping networks active so that there are opportunities available to them as long as they want and need.

I think those are such interesting points and certainly I’m sure very rich areas for discussion between financial professional and their client. I’m curious, what are some best practices that you might be able to share with our audience for those that haven’t necessarily engaged in those conversations to date, maybe especially around the career topics? Thanks for watching, and I’ll see you in the next video. Or maybe don’t feel like they’re experts themselves. How are others successfully doing this and weaving this conversation in and feeling like it’s a really, you know, a relationship building moment versus a moment of trepidation for the financial professional?

I see the end to the conversation? It’s talking about retirement age and planning assumptions. And when somebody is talking about extending their working lives, just asking some basic probing questions. What are your plans to be able to do that? What does that look like? What should we be thinking about? And what are some of the potential risks concerns, and this might be a place where data can be helpful. Our surveys of retirees find that many retired sooner than planned, and often due to either health issues or employment issues. So it’s kind of a hard conversation, but it’s also a reality check. And there are ways to talk about it compassionately and empowering and be actionable about it. And the there’s resources out there for, you know, they might have a homework assignment to read a book on the latest happenings in the workforce and how to prepare yourself, or it might be taking a class either on Coursera or at a community college, but really embarking on a conversation so that it’s meaningful, it’s thought provoking, it is meaningful, it’s actionable, but it is not judgmental, because that’s where we get into trouble.

Catherine, when you look at some of the demographic shifts that are evident in your data, I think about the importance of women in the workforce. I know from some of other work that Julie and I have done, it seems like everything is being delayed now. Marriage, marriages are being delayed, family formation, purchase of the first home. Are there generational differences? Are there gender differences? You’re probably gonna say all of the above. These demographic shifts that financial professionals, should they be aware of as they attempt to serve the client of tomorrow?

Absolutely. And every client is unique. And that is so important. And to recognize that and avoid any assumptions. And I will share an anecdote from my own retirement planning journey. There was a point years back where I realized I was a big girl, I needed to get financial advisor because I was trying to manage my own savings. I’m like, wait a minute. I need the help of a professional. And so I went sort of shopping for an advisor and through various highly recommended sources. And in the interview, meet and greets. I would say four out of five did not ask me what I did professionally. I’m a retirement researcher. It never occurred to them that, that I would have a career. I mean, it was just like, I, I w I felt like it was an alien from another planet. I wasn’t a person, you know, I was a person but I wasn’t a person. Um, and, and in the instances, I will say that people interviewing me were men and I’m not sure that they had the. Training or expertise or know-how to say, okay, here we have a woman, she’s ex-age financial professional looking for planning assistance. It was just a void of those questions. It was really kind of extraordinary. The one that did ask got the job. But- I was just gonna ask you. But that is It was just so telling to me that what would have been a most fundamental of conversations, was it? And to get to know people, who they are, the basics, what’s important to them, what their top priorities in life, what they hold most dear. Things that we wanna take with us in the old age throughout our lifetimes. The finance, the money is very important because we wanna be able to finance our dreams and our lifestyles. But you can’t really do that without knowing what you’re going to finance.

Catherine, along those lines, it’s just a question Julie and I have bantered back and forth about. Do you think it’s important for financial professionals to talk to their clients about the role that they play in their family, aka, will there ever be an expectation that they’ll provide care for another? I see this as an unplanned for expense or change to a retirement plan that people think it just sneaks up on them. And they never envisioned the fact that. Wow, you are an only child. Your parents may need help someday, but you’ve made no financial preparations for that. Is that an area that given what’s gone on demographically, you think financial professionals probably be, ought to be more intent in the next decade than they had been in the last decade in terms of discussing?

Absolutely. Absolutely. Because too often it’s looking at the individual or maybe an individual and their spouse and their situation and not factoring in the broader family, especially aging parents in this scenario. We see it in our workplace reports that it’s around four in 10 workers are either currently serving or have served as a caregiver to a loved one or relative. And especially now with the cost of long-term care being so extraordinarily expensive and long- term care insurance, kind of hard to get if you can get it and questions about the future of Medicaid. We all need to be having these conversations and a care plan, a care plan for parents so that they are not running out of savings or if that is imminent, what their care is going to look like and to what extent will the cost of care fall on the adult children. And at the same time the adult children needing to figure out how much care they might need and how they’re going to finance it as part of their overall retirement plans. The cost of care is extraordinary. I believe the average cost of a stay in a nursing home, not that anybody ever wants to go that route, but it’s about $12,000 a month. That can, and that’s not the high-end ones. That’s according to the Centers for Medicare and Medicaid. So if higher-end ones, that’s probably $20,000 a month. That can wipe out a nest egg in a quick minute. So it is absolutely critical for planning and risk mitigation.

As you think about some of the data and research that you’ve collected, and I know you’ve collected so much over so many years, and it’s all swirling around in your head, but from the financial professional’s perspective, what are some of key maybe generational differences or gender differences in retirement that are really important to take into consideration, whether it be from... The sort of the profiling or question asking process to the planning process. What are some of those things that you feel like maybe are missing or aren’t being addressed as frequently as they could or should be that really could help clients have a better retirement outcome ultimately.

One of the things is, and this sort of builds off the care even before any potential need for care, is survey after survey after, survey shows that most people want to age in place. They want to stay in their homes. They don’t want to move to a retirement community. Home is where the heart is. And, and yet we also know in terms of home design, some houses. Or more conducive than others, especially if there’s lots of stairs involved. And to have some reality checks there about housing situations, what home modifications may cost, what goes into those. Also, one of the things that I see and just in my travels and older individuals I know, there does often come a time where the house is just too much to take care of. And then to look towards senior housing. And that’s more for people in their 80s, not in their 60s or 70s, but you know what those options are and what the costs are associated with. And keeping in mind, home is where the heart is and when somebody does have to move, there are things that you can do to make the place as homey as possible. You might not be able to take everything, but take the favorite things. And one of the most important parts, this sort of an aside, but I think is critical is when somebody does make the decision to move and move, that family come together and start creating new memories in that location as quickly as possible. Having a celebration of various things so that it really feels like home is the place where you go to celebrate birthdays or anniversaries or school graduations. The things that we all love to celebrate.

In our conversation today, we kind of touched on a lot of topics that are kind of orbiting that investment topic that we initially introduced. But have you seen ways, what are the most effective ways that financial professionals can begin a conversation around some of these topics? Like if it’s not natural for me, because I’ve kind of always been in the investment current, if you will. How might I? Get into these kind of conversations so that I can understand my client a little bit deeper. Any suggestions?

Uh, yes, actually. And, um, a new term has sort of made its way into the planning sphere, longevity planning. Do you have a long joke, which is much more holistic. It has a financial component and an investment component, but it’s more holistic, it’s the things that we have been talking about and for financial advisors who aren’t comfortable with that, but their clients, chances are they have not done one for themselves. So maybe the first entree before delving into that is creating your own longevity plan, asking yourself and your loved ones these same types of questions and learn how they can inform your own decision-making, the pitfalls that happen away, the hard conversations. And some of these conversations, by the way, take many conversations. It isn’t like you can have a 15-minute meeting and, oh, this is my care plan. It can take months or years to really settle in on something that’s comfortable. But to introduce it into their own lives, I think would make it easier to begin those conversations with their clients.

It also would seem to me like it would be a great opportunity for financial professionals to share, again, changing the names to protect the innocent, but to share some of the good decision-making or maybe some situations where people wished they had made different decisions up upon this challenge of navigating longevity. So maybe educating my current client through other experiences that clients like them may have experienced it. Might have been part of. I think that kind of insight can really be valuable because I don’t know about you, but I find a lot of people anchor their own retirement plans in what they observed in their parents or their grandparents. And sometimes they’re unaware that today’s retirement might look an awful lot different than it did 40, 50, 60 years ago.

There is no substitute for good storytelling, things that worked well and the don’t let this happen to your retirement plan, or it’s of cautionary tales.

Absolutely. I was just going to say that I had an advisor share with me that one of the key questions that he asks any newer client upfront as part of the agenda is, tell me a little bit about the bathroom that you use in your home. And initially they kind of look at him and think, why do you care? And then he starts to say, well, I’m trying to understand, is it upstairs? Are they steep stairs? Is Is it slippery pile? Are you stepping into a tub? You know, describe it to me. And because he’s really trying to sort of begin the house safety assessment. And he just finds that sort of, you know having them describe the bathroom that they use is a very great way to begin that conversation. And so I just thought that was so interesting. And I know it’s something that he’s very passionate about and it’s that he has woven into the discussions for years.

Well, Catherine, just as we like to spitball with clients on their plans and things that they’re thinking about, we kind of like to do the same thing with you in something we call our lightning round of questions. And in the lightning round, we like to ask our guests very simple questions, but the reason we ask these simple questions is we think it gives our audience a better idea of who you are as a person, which then helps us even better understand where you’re coming from. And really get to know you better. So if you’re game, I’ll ask Julie to start with a couple of questions and then we’ll roll right through. Is that okay with you?

I’m scared. It’s okay.

We’ll go easy on you.

Perfect. Well, here we go. Would you rather travel to the past or to the future?

Definitely the future.

When you think about your day-to-day obligations, do you keep track on a paper to-do list or a digital to- do list?

Oh my god. My spiral binder is my lifeline.

You and Julie are going to get along very well.

It doesn’t feel good to cross the things off. I just love that so much.

Satisfaction of a check mark.

It is just amazing. Yes. What was your favorite board game as a kid?

Scrabble.

That’s a good one.

Would you describe yourself as an introvert or an extrovert?

Um, I’m a tweeny, because when I’m an extrovert, I am an extovert, but when I need quiet time, um, I m an introvert.

There you go. Got a little bit of both going on.

What’s a TV show that you’ve binged lately?

Oh my, okay, so I love Poker Face. Really? On Peacock. I’m not familiar with that. Writing it down. Okay, I can’t wait to check it out. It is, it’s great. It’s just, it is so beautifully done and the cast, everything about it is perfection. And every time I watch a new episode, I’m like, oh, I wish I would have written that. Now, not that I have any free time. I even have aspirations of writing a spec script for this show. Not that they would ever entertain it, but entertain it. But I am so enamored with that show. I would like to write for it. That is incredible.

Are you a morning person or a night owl?

I’m in Night owl.

What’s the first concert you ever went to?

This one does not date anything, it’s timeless. My first concert was Aerosmith. Oh, that’s such a good one.

That’s awesome. How about my last question? Would you prefer to online shop or go into the store?

Go to the store.

And if you could travel the world for free, where would you go first?

Mmm! For free, that means I should probably prioritize expenses. So, at the top of my bucket list right now is Egypt. I would love to, I’m not sure the timing is great to go there, but that is one of the places I would go. But as you described for free what I think would be a really amazing thing to do is envision a whole world tour, maybe a year long. Where you get to spend two weeks to a month at the places that I’ve always wanted to go to and see the great wonders of the world.

There’s another retirement vision. See, you just cooked it up like that.

Well, Catherine, we can’t thank you enough for being here today with us on the Human Centric Investing podcast and sharing all of your insight. And for those interested in the actual research, it can be found at the transamericainstitute.org website. And the title of the research report is called Retirement in the USA, the Outlook of the Workforce. Thank you again, Catherine for all the work that you’re doing to help us continue to have better conversations.

Thank you for having me.

Thanks for listening to the Hartford Buns human-centric investing podcast. If you’d like to tune in for more episodes, don’t forget to subscribe wherever you get your podcasts and follow us on LinkedIn, Twitter, or YouTube.

And if you’d like to be a guest and share your best ideas for transforming client relationships, email us at guestbooking at HartfordFunds.com. We’d love to hear from you.

Talk to you soon.

The views and opinions expressed herein are those of the guest who is not affiliated with Hartford funds.