(Continued)

Easing the transition
Growing older can be a confusing and frightening time. "Your focus changes as you grow older," Irving Beitler says. "When you're younger, your focus is on making money, growing assets. After retirement, you go from accumulating money to trying to keep the money you've saved."

In the case of the oral surgeon, Dr. Langston, when he made the decision to slow down, he had the two classic worries that nearly all seniors have: having inadequate income and having his assets eroded away by catastrophic health-care costs, such as an extended stay in a nursing home.

"When we did a review, it was a real easy meeting," Beitler recalls. "My client is an approachable guy. For one, he knows that whenever I call him, it concerns something of consequence. He knows that I wouldn't contact him unless there was something positive I could do for him."

At a meeting in Beitler's office, the agent and Langston talked frankly. "I knew he was a good one for planning," the agent recalls. "He was 61 years old then, looking to ease his work activity by the time he was 65. He didn't have any health problems yet, but that could change, especially as he got older." When Beitler brought up the idea of LTCI for Langston and his wife, the doctor readily agreed. "He liked the idea of picking and choosing with dignity his future care," Beitler says. "He knew that without long-term care insurance, nursing home costs could quickly erode the assets he had built up. In the New York area, nursing homes typically cost more than $100,000 per year."

Buying LTCI, then, seemed the logical thing to do, Beitler says. "It was a natural progression. My client didn't want to end up being a burden to his children or wife. He didn't want to have to count on anybody to take care of him but himself."

The doctor agreed to purchase New York Life LTCI policies on his wife and himself, and to buy it with the money he was spending on his DI insurance coverage. ''I was under no restrictions from the client," Beitler explains. "There was no family pressure. I just dealt with the husband and wife. It was their decision, and they kept the kids out of it."

At a second meeting at Langston's home, the agent and the doctor implemented the plan. "He signed the apps and wrote the check," Beitler says. "They were each getting a $100,000 per year benefit, unlimited benefit period. We didn't run into any underwriting problems, and the coverage was issued six weeks later."

The second thing the doctor did was drop his DI insurance coverage about six months later.

One product that is gaining in popularity among the over-65 set is the lifetime income annuity.

Trust
Beitler describes the sale to the oral surgeon as easy, but only because the client trusted his advisor. Although the quality of trustworthiness is important to clients of all ages, it is essential to senior citizens, says Larry Klein, CPA, author of Marketing Financial Services to Seniors.

"If a financial advisor is trustworthy, he'll always have the upper hand in dealing with elderly clients," Klein says.

There are several ways to develop trust with seniors, and the first is to be confident about what you are selling. "Seniors have an astute antenna for detecting self-confidence," Klein says. "They can smell no confidence 50 miles away. They can tell when somebody doesn't know what he's talking about."

Another way to gain trust is to modify your approach. "Seniors react negatively to being sold," Klein says. "They don't like a sales pitch. Instead, try asking many questions. Seniors react positively to that because it shows you have a genuine interest in them."

Related to this is the concept of plain speaking. "Don't try to impress a senior with language," Klein says. "That's the biggest mistake, taking the 'features and benefits' approach. That's where you whip out a piece of paper that lists the features and benefits of a product. If you do that, you're going to lose them."

Seniors would also rather be shown evidence of what you're talking about than take your word for it. "The financial services industry is a culture of speaking," Klein explains. "Seniors don't operate that way. They'd rather be shown a Morningstar report or an article from The Wall Street Journal. It has to be from a credible source they're familiar with, not some technical journal."

Seniors also have respect for authority. "If you're well respected in your discipline, seniors will think positively toward you and what your message is," Klein says. "They're very open to the value that people bring to a situation."

The best way to prospect among seniors is by conducting seminars, Klein says. "They've got the time to attend, money in their control that's not tied up in long-term programs, and they're motivated to gather information.

"Seniors are scared," he continues. "They don't have a paycheck anymore, so there's this financial insecurity of 'Will I have enough money to take care of myself? Is there something I can learn that will help calm this fear?'"

The most popular seminar topics, Klein says, are on the subjects of tax reduction, increasing retirement income, distributions from IRAs and LTCI. "Long-term care insurance is popular if you don't call it [that]," he says. "Seniors will perceive it as a product seminar, and product seminars die on the vine. They see them as hour-and-a-half commercials, and who wants to sit through that?"

Despite this, LTCI is probably the easiest sale to make to seniors, Klein says. "It's the sale that addresses a need that is the most pressing to seniors: Who will pay for my nursing-home care?" he says. "They may be initially reluctant to purchase coverage, but you can help them decide by telling them they have 30 days after applying to back out. In reality, by the time they've completed the app and signed the check, they're 98 percent committed."

The hardest products to sell, Klein says, are any type of equity investments, including variable annuities, mutual funds, equities and variable life. "These are all tied to the market, and that's a hard sale," he says. "Plus, seniors have a shorter time horizon. You can't sell them things that are designed to reach their peak in 20 years."

In addition to being sensitive to the financial needs of seniors, advisors need to be aware of their physical needs and comfort zones. Klein offers the following tips for advisors who specialize in the senior market:

• Don't have your offices on the 10th floor of a downtown office building. Have them on the first floor in a neighborhood where many seniors live.
• Make parking easy. Seniors don't want to park 200 yards away, nor do they like parking in an eight-story garage.
• You can keep your working hours between 8 a.m. and 6 p.m. Seniors don't want to talk business in the evening or on weekends.
• Have a small, round meeting table surrounded by uncomplicated chairs. The idea is to simulate the kitchen table. Sitting across a desk from your clients is too adversarial. You want to give the impression that you are on the client's side.

The most popular seminar topics are on the subjects of tax reduction, increasing retirement income, distributions from IRAs and LTCI.

Profitable relationship
For retiring oral surgeon Jerry Langston, his agent, Irving Beitler, was at his side well before his decision to slow down, and is still there now that the doctor is semi-retired at the age of 65. "He's still working at the practice part-time, although he doesn't really have to," Beitler says.

Langston was a bit of a dream client, Beitler admits, because "he did the right things at the right time. He bought the LTC coverage before health problems had emerged. A few years after buying the policies, he developed heart and prostate problems, which, if he had waited until he was older to buy, would have made the coverage more restrictive and much more expensive."

Beitler, who has dozens of senior citizen clients, still reviews and services the employee benefit plan of his client's practice, and he contacts the doctor about four times a year either by phone or mail. As a result, the doctor has given him at least four profitable referrals.

"I may have gotten lucky with him," Beitler says of his client. "He's not the type who just lets things happen. He makes them happen. If I hadn't been there at the time he needed me, he would have simply searched for someone like me; someone knowledgeable—a problem solver."

Page 1 | 2

This Month

Expert to Expert

Lighter Side of Life

Making the Transition

ViewPoint

Top     LEGAL NOTICES     Contact Webmaster    

Change/Renew NAIFA Membership     Get Advisor Today: Join NAIFA

© Advisor Today 2003. All Rights Reserved.