Beacon Flash: Navigating Longevity Planning for Your Clients’ Financial Futures – A Conversation with Frank McAleer

Frank McAleer

I just find peace of mind like this, I put my head on the pillow. I know all my state and trust documents are in order. I know I have enough money. I know something happens. My kids know where all the documents are. They can access them easily they know what to do. For the record my you know, falling asleep that easily just yet, but I’m trying to get there. That’s the benefit to the client. It’s that ultimate peace of mind to have everything in place.

Speaker 2

Welcome to the beacon flash to go to podcast for enterprise wealth management professionals looking to stay ahead of the curve hosted by Chip Kispert, Managing Director of Beacon strategies. This podcast explores the future of the industry and the most pressing issues facing today’s top leaders. Join us each week as we sit down with industry experts to discuss the opportunities and strategies for success.

Chip Kispert

Well, today’s a great day, I get to talk to one of my old friends in the business, Frank McAleer. We worked together a number of years ago at fidelity. He’s now at Raymond James. And Frank, welcome.

Frank McAleer

Chip, it’s great to see you again, we got to get the last November. It’s great to be reunited in this business. And one thing I love about, we have a lot of old friends in this business, we’ve all grown up in this business, and it continues to change. And here we are talking about another big change in my opinion, that’s happening now.

Chip Kispert

I think that’s great. And, you know, you and I have had a couple of conversations over over the last year on what you’re doing. I’m super curious about it. Let’s just jump right in. Right. And I think first, the first question I’m gonna ask is pretty basic. What is longevity planning? And how does it differ from financial planning?

Frank McAleer

It’s a great question. And it’s a question that you will not get the same answer from if you ask 10 advisors or 10 professionals like ourselves, you might get eight or nine different answers, maybe some will be the same. But everybody has a different view. And our view is longevity planning is a direct response to the new longevity meeting new life expectancies. And it’s helping advisors and most importantly, their clients navigate all the blind spots that they’re not thinking about when they do a financial plan, health care, aging in place, Medicare, safety of information, protection from elder fraud. I mean, it’s just, you see, I read about it more and more, because the demographics are so predominantly baby boomer oriented, right now, you know, 10,000, or more turning 65. So really, it’s all about helping clients navigate these blind spots, because they’re not even thinking about these things. They’re really not. Or they’re not thinking to ask their advisors about it, which is for advisors a big boon to your business, because what you’re doing is providing something unexpected, and you’re really differentiating yourself from your competition.

Chip Kispert

So we’re talking about longevity planning kind of big brushstrokes there. Maybe we can get a little bit deeper. And so what’s the gap? That longevity planning is filling today? And I think also, I heard you, I heard you kind of lock in and this is a big deal with us. At our, our investment roundtable. Last year, we talked about D cumulation. How important that is, yeah, I think our industry does a great job of accumulating assets, per se. But it’s kind of when people start to draw. So what’s what’s the gap that longevity playing is filling versus financial planning?

Frank McAleer

Well, let me add one more thing about longevity planning. It does include guaranteed income annuities, long term care, that’s all baked in. But what we’re really focused on and this answers your question is the gap that it fills in the past. And this is how we kind of stumbled upon, you know, building the resources that we’ll talk about. You were able to sit down with a client and talk about the financial plan for the future retirement plan. And the gap we found was when he started asking questions like, and these, you’ve heard of the three questions from my TAs lab, right, that you should think about before you retire to help you provide a better quality of life, who will change your light bulbs? How we get an ice cream cone and who we have lunch with? They’re great questions, right? They’re fantastic. They resonate. And who can you maintain your home base cream cone is all about transportation, how you’re going to get from point A to point B, and who you have lunch with, there’s not so much about the meal, as is about where you will live your community. There’s a lot of isolation that happens for folks when they’re done the work and yours and their families are throughout the country. So what the gap is this when we started introducing those questions to our advisors at Raymond James, and they started asking the questions, clients inevitably would say, Oh, my goodness, well, first of all, thank you for helping me plan for this. Think about it. Thank you for helping me put aside a financial contingency in case I need it for any event that come up. But also, where do I go? Now? What do I do? Where do I turn for these resources? That was the gap. And the other thing I learned I want to I was at MIT’s lab, they had a symposium for dimension, there was a young couple and the husband had early stage dementia. You know, sometimes you’re in sometimes you’re out, you know, mentally, but I’ll never forget the spouse, the wife saying, the biggest challenge we’ve had is we have to go to all these different places to pull it all together, I wish there was one place we could go. And that’s where the lightbulb started going off. Like, if you’re helping people plan for this financially, they need the resources, they’re gonna get the resources somewhere, it might as well be you at the advisor, providing these different resources. And when I say providing them, what we do is, we go out into the market, we find resources, for caregiving for critical care for Medicare, and we’re telling our advisors, you don’t need to be the expert. They’re the experts, we’re going to put them through a procurement process, make sure they really are up to snuff to be a partner with us or any other financial services firm. But you now become the center point advisor for this client, right? You are helping them coordinate, not only their plan, but all the resources they may need. That’s, that’s how we we stumbled upon it, we first asked our advisors to go out and meet the resources themselves, go meet the Medicare, expert in your community, go meet the Geriatric Care Manager, they said, no, no, we’re not doing that. Too much legal responsibility. We don’t know what to do. And I said, yeah, we’ll do it. So that’s what we did. And that so that’s the answer. It’s that it’s that gap between providing a contingency, but also providing the resources, you know, if you’re going to plan for, and I know I said this already, but they’re going to do it anyway. Might as well be you and your clients will love you for it. I’m going to have some proof statements if we get if we have time near the end to talk about that.

Chip Kispert

So it’s interesting. So two questions kind of spin out of that, based on kind of this new way of looking at, you know, a person, their retirement, their longevity? Does that mean that lots of people’s plans are underfunded?

Frank McAleer

And not necessarily, although it could, what we find the biggest benefit, as opposed to not being underfunded, is not spending recklessly or carelessly, this kind of goes into the whole answer of the accumulation like we can help the accumulation from a product standpoint, with a good long term care product, especially hybrid Long Term Care, with a good guaranteed income product. There’s financial software’s out there, like income discovery and income lab that help you distribute income to yourself in a tax efficient way. Right. But also, what you find is, and I’ll go to my own life as an example, all of that is I’m not, I’m not gonna say it’s easy to do. That’s hard to do. But when I look at, one of the reasons I’m passionate about this is in 2011, I lost my dad took a nap. If we were when Irishmen took a nap, never woke up great, you know, great funeral, one of those Irish funerals, turns into an Irish wedding and for three hours, and then, nine months later, my mom was discovered she was 11 years long, younger, she was only 74. And she had stage three lung cancer. Long story short, we didn’t know where to turn, we didn’t know what to do. And what you find yourself doing is reacting. And reacting is one of the worst things you can do. Because you’re just spending money, without even having time to think about it without even have time to see if it’s covered, are you going to are you going to recover from an insurance company or anything like that. So that’s, that’s a big part of it. When you talk about the accumulation, I mean, the essence of the accumulation is distributing money to yourself efficiently. And I find a few of, as I talked about, a few minutes ago, having this all planned out, having the finance contingencies, and knowing what resource you’re going to go to, if you need it, if there’s a critical diagnosis, if you need Medicare, if you have to have someone come in and evaluate your homelessness, if you can age in place or not. If you have all that in place, you’re gonna spend much more efficiently as, as a result, have more profitable decumulation for yourself.

Chip Kispert

Got it. That was super helpful for me, because, you know, because a lot of our discussions on this kind of my mind set goes to Alright, first kind of underfunding. But you guys are doing is really pretty incredible in terms of kind of that resource umbrella to help people because I know, you know, my own life. And, you know, you know, my mom has recently kind of gone through some of this this. The challenge of where do I go fine. Yeah, someone that helped me with stuff.

Frank McAleer

Yeah, I mean, it’s the hardest navigating our healthcare system is really, really difficult. And that’s one of the things we’re trying to help clients with, because it is it’s becoming fast and furiously part of financial planning landscape. And if we have time, I can tell you what some of our competitors are doing. We feel we’re still I think we’re one of the first to have resources like this. And I could see when you say it was helpful to you, it’s hard. If you’ve never dealt with Get your arms around it. I remember we first introduced this several years ago on a visor. So why are we doing this? Like, I don’t understand why we’re doing this. And it’s, there’s one commonality with everything we’re talking about. There’s one common element through it all. And it’s money. It’s money, right? It’s financial planning. And it just makes some, it makes the advisor what we call become the center point advisor for for your client, right? We all know that consolidation is something that we all strive for, especially when our clients become older. They will consolidated assets with you, if you’re the one talking about providing them. And I know one of the questions you want to ask me at some point is what’s the benefit to the client. The benefit aside from spending efficiently and also going back to having, you know, guaranteed income or long term care, the other benefit is knowing where to go like what resources to turn to, and I didn’t think about it. And the other The Ultimate Guide is, I’ve seen this term one mortgages, we use financial planning, I first saw it from a company that we’re both alumni of where we met was a study of financial planning by Fidelity Investments started in 2017. And their ultimate goal for the client is peace of mind. And that’s this, this helps get your client peace of mind like I defined peace of mind like that. So I put my head on the pillow. I know all my state and trust documents are in order, I know I have enough money. I know something happens. My kids know where all the documents are. They can access them easily. They know what to do. For the record my you know, falling asleep that easily just yet, but I’m trying to get there. That’s, that’s the benefit to the client. It’s that ultimate peace of mind to have everything in place. And that’s some of the resources we have, we have a resource called ever plans. That’s an incredible organizer for clients helps you organize your life. It’s not just a wall, they actually outline the different sections and subsections of your life, you should be thinking about having documents stored as not just taxes and trust documents, its family recipes, family heirlooms, passwords, stories, things like that.

Speaker 2

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Chip Kispert

Let me ask kind of the natural question. Having worked with advisors for a long time, getting them to adopt new things isn’t the easiest thing to do. So, you know, a how do you get how you get advisors to adopt? And then where does longevity planning fit into really that advisor tool chest right into that kind of bundle of services that they’re putting out there, and then making sure that it’s in their process? For every customer?

Frank McAleer

You nailed it, you just absolutely nailed it. It’s really it’s a difficult change. And I’m going to say something that I don’t think is controversial of some people said it might be but it’s not something that clients are asking for. They’re not asking their advisors who is your Medicare specialist, who’s your critical care specialist. And once in a while you’re waiting, the clients aren’t asking for this. And I’m like, bingo, thank you for saying that. That is the opportunity. Everything they’re asking for what’s that mean? They already know about it. They’re getting it somewhere else. You know, tell me about your asset allocation. Tell me about your alternative investments. That’s all good stuff. That’s the basis for a good financial plan. But the fact that your clients aren’t asking for these types of resources is why you should offer them. But it’s still difficult to bring it in into your practice. Because the other question is, okay, now I’m doing more work. And I can’t charge my clients for an out are you Yeah, you can, you can. Either, there’s two things you can do with a lot of these resources, you can make it a value add, which I contend that we’re one of the only industries in the world against the need to do more for our clients without increasing our prices, right? If you if you’re my client ship and you agree to do business with me based on these, this service offer I have and then I add a longevity planning service with these five resources, for example. And while I’m doing more for you, I should be able to charge more for that so we’ve been able to introduce tiered pricing for advisors where they you know, there’s basic planning and then there’s Cash Flow Planning and then there’s longevity planning. And also you can there’s, there’s an opportunity to add a subscription fee so to speak, like if you want to subscribe to our longevity services, and everything that comes with it, which is education, white papers, webinars, they pay a certain hard dollar amount every year. So as you know, I mean that that gets advisors moving. I mean, they’re not all about compensation, but they do want to make sure that they’re compensated for what they do and or they’re not completely wasting their time. So it is a challenge. But once here’s the other thing I would add in one of the other words, I’m hearing more and more is empathy. You know, someone wants certainty, what’s the return on investment? You know, for this? Like, that’s the wrong question is really what’s the return on empathy at the advisor receives? What is the return? They know what what does the advisor hearing from their client, you know, some of the feedback, we get to some of the most meaningful thank yous I’ve ever had. And I can tell you where from where I sit, our advisors, those that use our longevity resources, far and away have the highest AUM and the highest, trailing 12 revenue. But it is difficult. But once they get over the hump, right, it’s getting over the hump, and staying on message. It’s really it’s not something I can talk about one time, and advisors going to go do it. And the other thing is this, you know, as well as I do, most advisors are baby boomers, what there’s never been a better time to have empathy, because guess what you’re living it to as an advisor, you’re living exactly what your clients are living, everything you’re concerned about your clients, you’re concerned about. You know, I read a lot of books about financial planning, and you know how to communicate. And one of the one of the most powerful ways to do it is storytelling. And we all you even mentioned it earlier today, you we all have so many of our own stories, it’s a great way to relate to a client, and then segue into it, we’re both on the same page for both concerned about this, we have the resources here in the planning, ability to help you plan for don’t have the resources for it.

Chip Kispert

You know, it’s interesting, in the last 20 minutes, I’ve learned more about this than than I ever thought I was. And that’s fabulous. I think what you’re doing is great. I think, again, getting it into kind of that advisor adoption, it’s like

Frank McAleer

I will tell you like the partners, we’ve talked to you I’m sorry to interrupt you. But I’m getting excited the partners that we’ve you know, hey, we’ve called some of our partners, like, ever plans ever save clear match? And we tell them, they’re like, What do you want to do? Like, why don’t you want to do now we want to introduce you to our advisors, our 1000 advisors so they can offer and they’re like, Oh, my God, oh, this is a goldmine. And it’s not, it’s not an instant Goldmine, I will just tell anybody listening that it takes time, you have to stay on message. And you have to make it easy, but it’s so worth it. I will tell you that clients want this help more than anything else. And you and I both know that. I think about it all the time. You know, I think about my parents, I think about my wife caregiving for my dad all last year before he died. I mean, it’s it is out there caregiving. If I had to pick one, one item in our world that is ubiquitous, everybody’s experienced in caregiving. And there are a lot of resources for that, you know, a lot of resources that are unnecessary. And a lot of families are all over the place. How do you how do you coordinate caregiving for a loved one that’s in Pittsburgh, and you’re out in Denver? How do you do that?

Chip Kispert

That’s a big question right there. All right. So we’re wrapping up the show here, I always love to give you give you the final word. So Frank, take the final word.

Frank McAleer

I would say final word is this. Your clients, if you talk to your clients about these resources, you’re going to be turning them on to being aware of situations they can encounter that they’re not thinking of. Because it’s not natural to think of it day to day but and more than anything, they’re not thinking of it coming from you. Like what other clients not going to come to you and ask for any of these resources. And therein lies the opportunity, I would say differentiation, providing peace of mind and return on empathy. If you offer this to your clients, you will differentiate yourself from the competition. And I will say that in 10 or 20 years, we’ll just be differentiating. I don’t know. You could do you know do you know our own our own employer fidelity? They started their own Medicare agency last year. Yeah, their own their own fidelity Medicare agency. I know that our RBC is partnering with age wave and candlelight. Well, just as we partner with MIT age lab, I know that RBC also has an incredible resource for working with clients with dementia. So it’s happening more and more to become more mainstream, but I still think there’s a real, real opportunity to things differentiate yourself, and most importantly, provide peace of mind for your clients.

Chip Kispert

Thank you very, very much, Frank. What a joy that last 20 minutes was, and I love talking with you. You always have great ideas and such passion.

Frank McAleer

Thank you, Chip was great to get together. I enjoyed it.

Speaker 2

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