Top Four Ways Financial Advisors Can Support Older Female Clients After Major Life Transitions

(Jaime Desmond) Scan industry publications over the past few years for articles about providing financial advice to Millennials or Generation X clients, and you’ll be reading from now through most of next year. But when it comes to female baby boomer clients, there’s not nearly as much written material.

That’s unfortunate for many reasons.  Female baby boomers face the same challenges that their male counterparts are encountering as they transition into retirement, including skyrocketing healthcare costs, potential changes to government programs and a low-yield environment for fixed income investments.  Over and above these obstacles, many female baby boomers are also facing life-altering events such as being widowed or, in some cases, going through a divorce.

Meanwhile, with life expectancy rates going up, women baby boomers are facing an especially heightened risk of outliving their retirement savings, since they typically outlive men. Also, bear in mind that a large percentage of these older women come from so-called ‘traditional’ backgrounds, where their husband was the household’s breadwinner and primary financial decision-maker, which raises the stakes even more.

In compiling research results discussed this past autumn at the Ladenburg Institute of Women & Finance Symposium - an annual industry event focused on supporting women financial advisors that was held in October in Miami, Florida - we identified four key considerations for how advisors can most effectively support these older female clients, including for those already in, or not too far away from entering, their retirement years:

1) Create a holistic financial plan that fully incorporates insurance and income guarantee solutions. Female baby boomers who are suddenly left as the sole financial decision-maker after never having played such a role previously need a financial plan that contends with the prospect of skyrocketing health care and long-term care costs. Often, this means favoring investment solutions that can fill in the gaps that surface when Social Security payments fail to cover all their monthly expenses. At the same time, since it’s possible they could live much longer than even they expect, they’ll also likely need both long-term care and supplemental health insurance.

2) Keep the focus on income distribution, not portfolio growth. Next, advisors must force these clients to, in effect, forget about looking at their investments through the prism of portfolio growth – especially given current life expectancy trends. While growth is clearly a key consideration for most investors, income distribution and budgeting are far more important from the perspective of ‘transitioning’ boomers. Obviously, it’s impossible to retire, let alone comfortably, if they are not on track to cover basic costs for the rest their lives. At a minimum, that means that advisors may have to disabuse some of the notion that their retirement will be filled with endless traveling and leisurely strolls on the beach, as many may have come to believe. Meanwhile, advice regarding the best time to file for Social Security benefits will be invaluable for clients in this situation, along with guidance about when to begin withdrawing from tax-advantaged retirement investment accounts versus taxable accounts.

3) Pull in their adult children. Anecdotally, many newly widowed or divorced older women sometimes can be especially sensitive about not wanting to burden their adult children, thereby avoiding discussions with them about how they are thinking of being cared for in old age. In these circumstances, it’s helpful and productive, if not crucial, for advisors to proactively engage with adult children, bringing them into the client engagement to discuss critical day-to-day issues, such as, who in the family will be a caregiver or living will designee?

4) Put in place as many protections as you can against elder abuse. A sad but true reality is that older clients, particularly older females who haven’t played a primary household financial decision-maker role for much of their lives, are susceptible to financial fraud. Scam artists, especially in our digital age, are prone to prey on seniors. Engage these clients – and mobilize their adult children, if possible – to establish protocols up front for transferring funds and communicating financial decisions that will help combat potential instances of fraud.

Focusing on these four critical factors will go a long way for financial advisors towards ensuring that older female clients – especially those who have gone through challenging life transitions – are well prepared to enjoy the most secure and comfortable retirement possible.

Jaime Desmond is Chief Operating Officer of Ladenburg Thalmann Asset Management( and a committee member of the Ladenburg Institute of Women & Finance, which held its Annual Symposium in Miami this past October.


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