At Blair Hall Advisors, we realize that maturing has its challenges. In the mix of all the many things that are changing, it can be easy for a retired investor—and their adult children—to lack an appreciation for how an older person’s wealth management situation may evolve.
We’ve seen four common, often concurrent scenarios and have a recommendation for each. You are invited to read and share.
1) The investments have become out of sync with the maturing adult’s situation
As we age, it’s not uncommon for our financial situation to shift, even throughout retirement. For example, some people may need to be more attentive to wealth preservation than what their investing habit might have been during their earning years or early retirement. Alternatively, a mature investor might find themselves with more resources than they need, meaning that a portion of their portfolio can be invested aggressively for later generations.
It’s not a given that a financial advisor will do the work necessary to collaborate with a maturing client to make these determinations. Many are too busy; others are indifferent; some might have good ideas but will avoid challenging the client’s engrained habits and preferences.
The fact that an advisor might work for a giant brand name firm is no assurance of a high level of care.
Recommended: Ask the advisor to do a “cash-flow based” financial planning exercise to help tune the portfolio if a plan has not been done recently. If the output doesn’t seem thoughtful and educated enough, get a new advisor. If the plan involves mostly the advisory firm’s own mutual funds, be skeptical.
2) The long-beloved financial advisor has retired or is no longer the best fit
Another frequent problem is that the maturing investor did in fact have a terrific advisor, but “Joe or Jane Wonderful” has retired, and their successor is less skilled, busier, or less committed to the investor’s life success.
Or perhaps Jane Wonderful is still working, but she focuses only on investments. Now that the investor is maturing, he or she needs someone who can collaborate with adult children, work with legal and tax advisors, and strategize with an eldercare consultant.
If Jane Wonderful is a great fit but is on the edge of retirement, you should also begin planning for a transition.
Recommended: Take a step back and ask yourself if the financial advisor has broad enough purview; strong education and training; enough time; and adequate concern for you. Ask them how many clients they have. If it’s over fifty or so, be skeptical of how much care you will receive. Ask them if they will collaborate directly with your other advisors; does their firm even allow it—many firms do not.
3) Intergenerational collaboration could be a big plus
Starting on intergenerational collaboration can be one of the toughest items for the maturing investor. After all, guiding your own investments is an expression of independence, self-reliance, and purpose. Starting to collaborate with one or more adult children means acknowledging a beginning to an end to that independence and self-reliance—and perhaps one less avenue for having purpose.
Yet for most of us, intergenerational collaboration is as inevitable as the earth rotating around the sun. The real question is whether the maturing investor starts the collaboration in time—and earnestly—to lend the most guidance possible to the process.
Especially when the maturing person is more financially sophisticated than his or her adult child or children, we encourage an early start. This allows the elder to help guide the education and upskilling of the next generation, which in turn can be critical for the elder to get their own best financial results.
Collaboration can be especially valuable for singles, widows, or widowers, who may lack the benefit of a beloved spouse as a sounding board.
Intergenerational collaboration is also a loving way to prepare for the care of a younger or healthier spouse who may lack an interest in finance and investing.
The best financial advisors should be pleased to help a maturing investor discuss the variety of options for involving adult children—or a niece, nephew, or other caring younger adult.
Recommended: Share this article with your adult children and financial advisor and ask them for their thoughts. Keep an open mind as to where the discussion may lead.
4) It’s time to transition from a do-it-yourself mindset
It can be especially challenging for maturing investors who have been do-it-yourselfers to navigate the inevitable transition to involving others.
For most maturing investors, staying permanently in do-it-yourself mode does not seem the wisest course. As we age, the possibility of an out-of-the-blue illness increases. If neither a professional advisor nor an adult child is sufficiently involved in the finances, the family can find itself in a difficult situation, including possible difficulties in mobilizing the investor’s resources in time of crisis.
We urge the most ardent do-it-yourselfers, at a minimum, to work with an attorney they trust to make sure emergency legal documents are in place, to maintain organized records, and to confer with key family members on the important “what-ifs.”
Recommended: Share this article with your attorney and be open to his or her honest guidance.
If you’d like to explore these or other concerns, for yourself or someone you care about, we invite you to contact us to chat.