Financial advisers are planning to increase the breadth of their discussions with clients in 2016, with more advisers spending additional time talking about several topics — and
Social Security will get top billing.
Next year a quarter of financial advisers said they will increase the amount of time they dedicate to discussing
Social Security with clients, compared with how much time they spent on the subject this year, according to the
InvestmentNews 2016 Outlook survey of advisers, fielded earlier this month.
A year ago, only 8% of advisers planned to bump up client time dedicated to Social Security discussions, according to the survey
InvestmentNews did back then.
“Talking about Social Security with clients is even more important now, with the government closing more of the loopholes,” said Mackenzie Martin, a financial adviser with McCoy Foat Wealth Management Group. “That will be a push for talking about it in the next couple months.”
The
Social Security benefit rules regarding claim-and-suspend filing options will change as of April 30. At that point, anyone who files and suspends will no longer be able to trigger benefits for a spouse or dependent child, nor will they be able to request a lump sum of suspended benefits.
Many advisers also plan to increase the time they talk about retirement planning and withdrawal strategies in 2016.
(More: The critical retirement cost many advisers aren't discussing with clients)
About 20% of advisers said next year they will spend more time talking with clients about cash-flow planning and 19% said income-tax planning would become a larger focus of discussions, the recent online survey of about 423 advisers found.
Each year it seems advisers are expanding the amount of time they discuss topics other than clients' investments — and that's good news, according to Julie Littlechild, founder of AbsoluteEngagement.com, an adviser consultancy.
“As critical as investments are, talking about them doesn't build the deeper, more emotional relationship,” she said. “Advisers need to be addressing these other issues if they want to distinguish themselves. These are things that really mean something to clients and they want to talk about them.”
(More: Great client experiences trump less telling performance metrics)
Other topics advisers plan to talk more about include
estate planning, health-care planning and Medicare, charitable planning, college planning, and business planning.
Ms. Martin said she's prioritizing business-planning discussions this year because she believes owners are finally seeing sales increase and are hiring again.
She'll be reviewing operating agreements and buy-sell agreements to make sure they cover all types of problems from death and disability to divorce or bankruptcy.
Other advisers said talking with clients about how their investments line up with their social and environmental values is a priority for 2016.
Marlena Sonn, an adviser who already talks with her clients about socially responsible investing, said investors have to look at the
possibly catastrophic physical impact of climate change in 20 years as part of retirement planning. And advisers should be guiding them, she said.
“It's a bit cavalier for financial advisers to be sticking to rote advice, like telling 30 and 40 year olds to max out their 401(k)s, when we have a significant environmental crisis that needs to be averted through thoughtful deployment of investment dollars,” said Ms. Sonn, founder of Treebeard Financial Planning.
