Mastering the seniors market

The following is based on one of The Covenant Group’s clients. All of the names and telling details have been changed.

One of our clients, Jeff Allen, sought our help in trying to break into the seniors market. 

At the age of 48, and after fifteen years as a financial advisor, Jeff had built a practice that generated around $180,000 annually, but he’d been at that level for the last few years and eagerly wanted to break his revenue ceiling. Two years ago, after attending a seminar on demographics that stressed the aging population, Jeff thought he could grow his practice by focusing on this market. The statistics were impressive: by 2016 at the latest, North America will have far more seniors than children aged 14 and under. It is estimated that trillions of dollars will pass from seniors now over 55 to younger generations. We are not only living longer but also generally living healthier. 

Excited about the opportunity, Jeff approached a number of his current clients and asked for introductions to their parents and grandparents. He managed to create a number of opportunities, but after a year of working the market, Jeff was not impressed with the results—his income was still around the $180,000 mark and that was after working harder than he had in years. 

When we met, Jeff said, “I’m frustrated. I know there’s a lot of potential with these seniors. Many of them have seven-figure net worths. Furthermore, most of them have poor investment strategies or have done little to protect their estates. There are tons of unmet financial needs that need addressing, but I just can’t seem to make these people budge. And what’s worse, because most of the seniors I’ve approached are related to my current clients, in some cases, it’s put a strain on some of my client relationships. I had one client who was frustrated that I couldn’t convince her father to go ahead with my proposal. Another was upset to hear that his grandmother didn’t like me. Maybe the seniors market just isn’t for me. But I don’t want to give up on it, especially after seeing the potential that exists there. I know that if I can make it work, I could easily double my income.” 

Jeff was a successful advisor to the small business market, so I asked him what he thought the key to his success in that market was? 

“Easy. I used to own my own business, so I connect with small business owners. I know the challenges they face. I know their issues down cold. I know most of them aren’t diversified. I know most of them sign personally for their corporate loans but don’t protect their debt. And I know how I can help them.” 

Our coach agreed and said, “A strategic partner of The Covenant Group, Graham McWaters of The ElderPlanning Solutions Group, is one of the world’s leading experts on the seniors market. And one of the first things he likes to do when working with advisors is get a read on how well they know the seniors market. He has a series of ten true or false questions, so let me ask you a few. 

“Baby boomers are the fastest-growing segment of the population.” 

“True,” Jeff said. 

“A person’s personality changes with age.” “True.” 

“Many older adults remain interested in and retain the capacity for sexual relations.” 

“Looking at my parents as an example, I’m going to have to say false.” 

“Lack of income is a major reason older persons don’t modify their homes.” 

“True.” 

“The older you get the less sleep you need.” 

“True.” “And lastly, pain is a natural part of the aging process.” 

“I’m going to say true.” 

“Well, Jeff, It’s no wonder you’re not succeeding in the seniors market. You didn’t get a single question right.” Jeff looked shocked and embarrassed. Our coach explained to Jeff, “the seniors market is like any other market. You have to apply the same best practices. You’re a success in the small business market because you know that market. You were a small business owner yourself, plus you’ve studied their needs, their issues, and their values. You’ve studied the tax laws and legal challenges they face. You’re intimately acquainted with the various products and services you can bring to bear to solve their problems. But you’ve done none of that for the seniors market. You can’t just go lumbering into the seniors market on a hope and a prayer. You’ll get pummelled. And that’s what’s happened to you. Furthermore, you’re eroding the confidence in your existing clientele. And that’s dangerous. Your foray into the seniors market should be doing the opposite. Your existing clients should feel more attached to you. And doors should be flying open for you. 

Our coach then asked Jeff, "Are you really committed to this market or not?” 

Somewhat chagrined, Jeff replied, “I want to make it work, yes.” 

“Good, because you’re right, if you master the seniors market, you could easily double or triple your revenue in the next two to three years.” 

“So, what should I do?” 

Our coach explained, 'We recently worked with another advisor, Harvey, who is in the same boat. He told us about a case that he blew. After chasing the former CEO of a giant engineering firm, he finally got the appointment. The client, Vern, and his wife, Lynn, both in their seventies, came to Harvey’s office. Ten minutes into the appointment, Vern and Lynn excused themselves and walked out.” 

“What happened?” 

“Harvey’s office is on a very busy street downtown and they had trouble finding a parking spot which caused them to be 20 minutes late for the appointment. Harvey forgot to tell them where to park and when they finally found a spot it was quite far from his office. Harvey could see by the look on their faces that they were not happy when they arrived. They both have walking problems due to a recent hip operation for her and a bad knee for him…I guess the long flight of stairs leading to his office didn’t help the matter too much. Finally, when they sat down in Harvey’s office, Harvey only had regular coffee to offer and no artificial sweetener and that made Vern upset since he can only drink decaf and can’t use regular sugar as he is a diabetic. Harvey figured they walked out because they thought that if he couldn’t meet their simple needs, he would not be able to manage their financial plans.” 

Jeff admitted he’d made similar mistakes. 

Harvey continued with private coaching sessions and, within a few months, began conquering the seniors market. He moved his office to the ground floor, studied the unique needs of seniors, learned how to communicate with them, and stocked his kitchen with water, decaf coffee and artificial sweeteners. He used to close one out of every six elderly prospects. After working with us, he began closing almost nine out of every ten. Excited by Harvey’s example, Jeff took the same approach. He began working us and within a few months also began to master the seniors market. What most impressed Jeff was the positive feedback he started to receive from his younger clients who were thrilled with the work Jeff was doing with their parents and grandparents. 

Jeff is now on target to reach the $300,000 revenue mark for the year. 

Lessons Learned 

Jeff learned four key success factors for mastering the seniors market.

• Seniors are just like any other market. Success depends on a deep understanding of the issues and challenges seniors face. 
• There is more to riches than money. Understanding what happens to people as they age is just as important as understanding someone’s risk tolerance when establishing their asset allocation. 
• A seniors-friendly office is very important to attracting, maintaining, and retaining seniors as clients. 
• Learning how to communicate with older clients is crucial to the whole equation.

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