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Why I Only Deal With Clients Over Age 60

By Larry Klein CPA, MBA

Why prospect only seniors?

I've been dealing with the senior market exclusively for over 10 years. I find them to be the single best, large market. (There are other great markets, such as people with assets over $10 million or presidents of high tech companies, but these are very small markets and more difficult to penetrate).

People over age 60 total 44 million people, about 16% of the US population. But they hold well over half of the investable assets. If you want to gather assets, gather where the assets live. Additionally, there are 5 important, issues that make seniors a great market:

  • Very few seniors are on the internet (regardless of what the studies show, do your own study and ask 10 seniors how often they use the net). They do not have the self-sufficient attitude held by many baby boomers , "Why should I deal with you. I can buy no-load funds, get all the information I need from the net and buy no-load term insurance there."
  • Seniors have been "around the block" and they value good advice. They have lost the arrogance of thinking they can outdo you at your profession.
  • Seniors are NOT performance oriented. They will not complain about their portfolio rising 18% when the market was up 30%. You do not need to meet some impossible benchmark. Seniors value a trust in the relationship and knowledge that you look out for their interest. They want to preserve what they own rather than get rich.
  • They have control of their wealth. Their money not locked up in a 401(k), 457 or other institutional plan. They can make a decision to move $100,000 or $500,000, today.
  • They have greater incentive to take action—a 60-year-old does not have as much time remaining as a 40-year-old. This gives rise to opportunities for estate planning, long term care, educational funding for grandchildren, and significant investment management fees. Younger investors do not offer this breadth of opportunities for financial professionals.
  • With seniors, you do not sell product and product features and you do not need to have the best fund/policy/program. Seniors buy you. Once you earn their trust, they hand over the money and tell you, "If you think it's good, then let's proceed."

Penetrating this market will require a new mindset for some professionals:

  • Sell comfort and security. Do not sell opportunity. Seniors want to protect what they have accumulated. Show them how to do that and FEEL comfortable, and you have a client for life.
  • Drop all jargon. I never even use the phrase "fixed annuity." I ask, "Do you have the type of annuity where the principal is guaranteed but the interest rate has been falling over the last 10 years?" Even the simplest phrases that professionals use can be confusing to clients. And unlike some, who recommend that you need to confuse 'em to sell 'em, I find this advice to be non-sense. I have gathered more assets over the years by being crystal clear in my communication and having my client understand 100% of my language.
  • Forget about "closing" these investors. Your presentation must be strong from the first word. A strong presentation flows naturally into an easy close, "If that makes sense Mr. Jones, what we need to do is complete one of these forms and…." If you haven't sold yourself and built trust, the harder the close, the faster your prospect will be gone.
  • DO NOT assume that seniors want to leave a big estate and provide for their children. They want to provide for themselves FIRST. So sell current benefits--more income, a guaranteed return, insurance protection for the living. I had an insurance agent gush to me about a variable annuity that guaranteed a 6% annual minimum return if held until death. That's great, but most seniors couldn't care if the return was 100% a year if they need to die to get it.
  • Obey their experience. If your prospect's next door neighbor told him that whole life is a bad deal, then DROP IT. Logic is your worst tool with the senior market. I call this phenomena, "The sample of one." A senior's single personal experience, that one data point, will outweigh the realities of millions and all the facts you can deliver. Educate only when the prospect is open to it, not when they have already told you about "their truth."

Obey these few rules, and you will find the senior market financially and emotionally rewarding.

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© 2008 Financial keynote speaker—Larry Klein