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Financial planning, Investment and Self Managed Super Fund Article
What to do about Aging Baby Boomers - Part 4
By Lester Wills
1st October 2003
This article may be out of date.
A person’s “age” is most likely different from their chronological age. There are numerous studies illustrating that mature adults think of themselves as ten to fifteen years younger than they really are. Some of it may be simple denial but most of it represents an ageless spirit and they do not classify themselves solely by age. The old adage, you are as old as you feel is particularly true for the Boomers.
The Boomers are often concerned about their family’s future and most want to protect their assets. These days they may be considering ways to help their children with the financial pressures they are facing. This is evidenced by the growing trend of Boomers re-mortgaging their houses in order to provide their children with help putting a deposit together for a house. Boomers may have the reputation of being selfish, but as a cohort, they fight for and treasure their children.
Re-marriage is also a possibility. Many Boomers have faced the financial trauma (to say nothing of the emotion one) of separation and divorce. Consequently, they may be re-evaluating their financial responsibilities and obligations. This may include a new family as their proposed new spouse may already have children and so a second family can become a reality very easily. This may require careful juggling of financial ties between the old and the new.
Whilst the vast majority of Boomers are in relatively good health, a not inconsiderable number suffer from a variety of ailments, which are exacerbated by age. They may not like to admit it, but perhaps their hearing is not quite what it used to be, or they may need to wear glasses more than they used to. I hate to admit that both conditions apply to me. My hearing is fine, except I notice that I have to listen very carefully when someone has a quiet voice, or when I get tired I find that I have to use reading glasses more often. Human frailty is something no one likes to admit. Many businesses are forged on relationships. A very good way to develop a meaningful relationship is to have some appreciation and understanding of the people with whom you are doing business. By being tuned into their values and needs, offering solutions to help them remain independent and productive means that you are likely to become a trusted partner, and will be able to provide real service.
Ageing Boomers may not always clearly understand all of your proposition when you are talking to them. The problem for you is determining what is the appropriate level of vocabulary and investment sophistication to use when presenting to them. What all too many fail to realise is that there is a great difference between providing lots of information and clear communication. A key rule of marketing and one I often espouse, is to talk in their language, utilise their values, target their needs. In many ways a successful financial planner is very different from their typical older client. Since Ageing Boomers control very significant amounts of wealth, it is worth considering ways to ensure that your message is transmitted in a manner that means it is received, loud and clear. Here are a few suggestions
Boomer Approach 14
We all know the rule of KISS. Keep It Simple Stupid. The trouble is, it is all too easy to forget that the terms you are used to, others may not be. So, keep the message simple. When speaking or writing, don’t overload your ageing prospects with unnecessary information. As I pointed out in the 19th edition of the Weekly Email, if people did not understand the advice being explained it can have a bad affect on their perception of the adviser’s expertise.
In other words, when the potential client did not understand the information, they caste doubts on whether the “expert” really understood what they were talking about. Some may have felt that technical terms were being used to hide a lack of knowledge. This in turn affected the perception of their trustworthiness. Poor understanding seems to have a direct correlation with lack of trust. In such situations you would be going backwards at a rate of knots.
What many forget is that what clients really want to know is, WIIFM. What’s In It For Me.
So tell them, in plain and simple terms.
Boomer Approach 15
We have all seen adverts where the scene depicted is either so outrageous or simply not something we would do or be involved in. Allowing people to dream is one thing, making things unrealistic is another. People need to feel comfortable with what they are being told. They need to relate to the story. Consequently, make the message familiar. This is particularly important with Ageing Boomers because as people get older, they develop greater resistance to unfamiliar information and people. If you are explaining a concept that are not familiar with, link your ideas to things your prospects will know about. Do not assume they have sound financial knowledge, even if they already have investments.
A valuable approach is to compare your ideas to everyday experiences or things they have done in the past. Inflation is the classic. Many use bar graphs and charts. I have found that talking about the shrinking dollar a very useful method. One of the client newsletter articles I have written is called the silent thief and talks about the ravages of inflation. I point out that every dollar in a person’s pocket in 1970, was worth approximately 35 cents in 1980.
Another way to consider this is to look at the cost of items. I point out in that article that would have cost $1.00 in 1970 would have cost almost $2.80 in 1980. Another way is to think about the cost of simple basic items, like a loaf of bread, a bar of chocolate a tin of dog food or whatever.
In addition to making the message familiar, it should be repeated as the majority of people forget at least half of what they have heard within 24 hours. By the end of a week very little will have been retained unless it has been reinforced. Making it familiar means they relate to it, which provides some reinforcement and as a result is easier to visualise. Repeating the message enhances the process.
Boomer Approach 16
We have all no doubt experienced the joke about women navigating have to turn the map upside down. For those who do not know, this is true and has a biological reason. The human brain is made up of two distinct hemispheres. Girls usually developed linguistic skills before boys, which is why they often do better at English at school. Boys on the other hand are often better at puzzles. That is because the two hemispheres tend to focus on different types of activity. In overly simplistic terms, the left hemisphere is the area for linguistic skills and the right hemisphere is more focused on spatial awareness. Women are usually left hemisphere dominant whilst many males are right hemisphere oriented. Obviously this evens out over time in most instances. In some instances, women may not always have the need for the spatial awareness skills of men. So, men can more readily translate the image of the map in their mind, women often find this difficult, at least to start with. Before I get myself into trouble I must point out that women can usually master the skill very quickly if they want to.
Having said all that, many planners develop left hemisphere dominance as this is where logical skills develop. As a result they often are comfortable with numbers. The consequence of this is that they may feel very comfortable explaining something in terms of numbers or perhaps even with a spreadsheet. However, not all people think this way. It has been found that people generally get about 80% of their information visually (utilizing the right hemisphere), especially as they get older. Consequently, it can be much more effective to communicate with Ageing Boomers visually rather than numerically. Utilise images, pictures, graphs or whatever. Not all people will respond to the same things so having a selection is probably a good idea. Remember the old adage, a picture is worth a thousand words.
Boomer Approach 17
I often ask people, how do you boil a frog? I have absolutely no idea who comes up with these and no I have not tested it, but apparently it is true. If you place a frog in hot water it will jump out. But, if you place him in cold water and slowly heat it up, he will sit there until he dies. Why? Simple, the water temperature changes slowly. Changing attitudes is the same. Psychological testing has shown that the most successful way to change a person’s attitude is to manage the process in a series of small steps. Going for the big hit can often just make people defensive. Consequently, take it point by point, ensure understanding and change the attitude slowly.
Each point should be articulated carefully and slowly but not too slow or they will think you are treating them like idiots, which is not exactly the best way to win hearts and minds. Let each point sink in. Watching the listeners face is often a clue as to whether the message is reaching home base. Ask if they have any questions. Once you are confident they are clear, move on to the next point. From time to time, stop, review and show how the points thus far all link together.
Showing the logical flow of the argument a number of times makes them feel more comfortable. Stopping and reviewing means you are reinforcing the message, making it more likely it will be remembered, especially if you get agreement at each stage. A simple way to think of this is to ask yourself, will a confused and overloaded client buy? If they do, will they thank you for it later and equally important, will they be happy enough to recommend you to others? People who are confused are usually reluctant to move on. Clarity provides impetus to proceed.
In this regard, do not make your meetings too long. If they are comfortable they will happily come back, if they are feeling uncomfortable and under pressure, they will not want to go any further anyway. Do not be afraid to end meetings early. Remember, with small steps can come great changes.
More next month.
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