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Beyond the Numbers    Financial Advisor eNewsletter

Life stage strategies can help financial advisers deepen client relationships and develop unique competitive advantages.


A financial adviser is getting ready to meet with two clients. On paper, they look almost identical. They are both male, age 58, married, employed, homeowners, and have about the same level of assets and income. However, the financial adviser is preparing for two very different conversations. Even though these two clients are the same age, the adviser knows they are in different stages of life, and therefore have distinct hopes, worries, financial priorities and need for guidance.


Marketers have long known the power of life stage marketing. The newly engaged are deluged with wedding magazines and advertisements. New parents are greeted — usually even before the baby is born — with a flurry of coupons and website ads selling everything from diapers to daycare. These marketers know that life stage transitions trigger newfound needs and create rare windows of opportunity to engage and win over customers.




Changing life stages can also have profound financial implications, and clients who are about to enter a new life stage very often need to re-think their financial planning. A few examples include:


• Marriage. Almost a third of newlyweds know nothing about their spouse's long-term financial planning, and a quarter are surprised by their spouse's spending habits, according to a survey by Experian. Marriage can usher in many significant financial planning needs, from buying a home to planning for children. It also requires new dialogue as spouses learn how to develop a financial plan that addresses both their priorities.


• Parenthood. Parenthood is magical, but so are the costs. On average, it costs about $250,000 to raise a child, according to national studies conducted by the U.S. Department of Agriculture, and that doesn't even include college. Planning and saving early is often the key. While their children are learning their ABCs, parents are often learning a new lexicon of 529s and Roth IRAs.


• Empty nesting. When children move out, parents may grieve, but usually not for long. Eighty percent of empty nesting parents are busy planning their dream vacation, according to a survey by PulteGroup. Empty nesters may relocate, remodel, pursue new careers, take on new hobbies or accelerate retirement savings. But parents should take care when counting the chickens that left the nest: Boomerang kids are now a common phenomenon, and more than a third of millennials age 18 to 34 still live in their parents' homes, according to U.S. Census data.

• Grandparenthood. Compared to prior generations, today's grandparents are often far more engaged in the lives of their grandchildren, sharing new experiences, life lessons, wisdom and money. Sixty-two percent of grandparents provide some level of financial support for grandchildren, from paying for dance classes to contributing to college funds, according to a survey by MetLife.




Life stage strategies can help financial advisers not only grow their business, but also deepen client relationships. Integrating life stage insights and strategies can help financial advisers to:


• Develop smarter, more effective marketing. Life stage marketing is all about reaching the right customers with the right products at the right time. Targeted outreach, newsletters and educational seminars are just a few ways to find and connect with clients entering new life stages.


• Help clients navigate life challenges. Many clients entering a new life stage have a limited understanding of what changes and challenges await. By helping clients understand and anticipate these changes, financial advisers can build greater client satisfaction, deeper loyalty and more opportunities for referral.


• Create the best financial offerings. With a deep understanding of clients' life stages, advisers can create the most appropriate financial plans to prepare for what's ahead. Moreover, by connecting with what is most important in their clients' lives, advisers are better positioned to focus on selling the offerings their clients value, instead of product features.

This article is a publication of Life Stage Insights, a client discovery and engagement system for financial advisors.

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