Help clients feel confident and in control of the retirement planning process

The thing I loved most about the old Star Trek series was the interaction between Mr. Spock and Captain Kirk. Mr. Spock always used sound logic to make his decisions while Captain Kirk often made gut decisions relying mostly on his emotions. Being human, we are all like Captain Kirk in that almost all the decisions we make are influenced by our emotions.

The concept of emotional bias tells us that emotional decision making is a stronger force than rational decision making. Emotional decisions are often not logical and can sometimes be suboptimal. In many cases, our emotions will even lead to inaction, where no decision can be made at all. This is especially problematic when planning for retirement. So, navigating through emotional roadblocks is critically important. A strategy that may help is to focus on making sure people feel confident and in control of the planning process.

As an adviser, you should always keep these two feelings in mind and work to ensure that people are confident about what they should do, and feel in control of what they are doing.

Here are five ways to give your clients the confidence and control they need to take action:

1. Time for a financial pep talk. A great way to instill confidence in someone is to make them feel that what they are setting out to do is very achievable. Describing how you can work together with your client to develop a personalized strategy to help meet their goals is a great first step. Explaining that small steps can improve their financial situation and that they can customize their path helps to frame these financial decisions in a positive way, giving clients confidence and the feeling of being in control.

2. Color outside the lines. Here is where financial professionals shine. It is human nature to want it all in retirement. But the reality is clients need to prioritize based on their specific situation. Here are questions (and there are probably many more) that can help uncover what’s most important to them. As they provide answers, their true priorities will become apparent, and their sense of control will strengthen.

• Which is more important to you, asset growth or guaranteed income?

• What are the three things you want to ensure you have in retirement?

• Do you plan on maintaining your current lifestyle during retirement?

• How prepared do you feel you are for retirement?

• How confident are you that you will meet your most important financial goals?

3. First what, then why. Providing clients with the right services to meet their needs is important, but explaining how each offering is tied back to specific needs helps to instill confidence in their decisions.

4. Set it, but don’t forget it. Services you suggest should be the starting point (an anchor) for making adjustments to a strategy as necessary. Clients are very aware that their situation may change so a financial plan that is adaptable is critical for their confidence and control.

5. Be the phone call they look forward to. Ongoing support builds confidence and establishes your position as a trusted resource. Before you leave the client, schedule a follow-up for six months out to check-in on the plan and see if any adjustments need to be made. And of course, they can call you. Wouldn’t that be a nice thing?

(More: How financial advisers can prepare clients for potential life-altering events)

Thinking about retirement, and planning for it, is an emotional process. To be more effective, we need to help people move past the emotional roadblocks that can make the process more complicated than it needs to be. Unless, of course, you’re talking to Mr. Spock.

Philip E. Caminiti is head of retail annuities sales, third-party distribution at New York Life.