How to Plan for the Transition of Our Financial Caretaking

How to Plan for the Transition of Our Financial Caretaking

For seniors, arranging to entrust financial affairs to someone else is an important part of preparing for old age. Once you have chosen a surrogate and dealt with some of the details laid out in last week's column, one question remains. How will the transition occur?

Here are some suggestions, based on the work of Carolyn McClanahan, MD, CFP.

1. Simplify.


A good first step is to simplify your finances. For example, consolidate checking, savings, and retirement accounts. Reduce check-writing by using credit cards wherever possible and paying off the balances every month. Reduce credit cards to three: one to use in public, one only for automatic bill paying, and one for other online purchases. Not only does this simplify record-keeping, but it minimizes the disruption when one is stolen (Believe me, it happens. It's happened to me several times.) As McClanahan points out, "The easier it is, the longer independence can be maintained."

2. Inform. 


Your surrogate needs to know about all your assets. Not only does this include common liquid assets like bank accounts and securities held in taxable and retirement accounts, it also means more obscure liquid assets. Some examples include variable and fixed annuities, structured notes, collectibles, mineral rights, and cash value life insurance.

3. Provide access. 


It’s helpful to have the person who will take control of your finances begin by periodically monitoring your accounts. This will require them to have access to your financial records. If your affairs are relatively simple and your surrogate is local, you can authorize them to access your accounts and receive statements. Another good way to share information, especially if your surrogate lives at a distance, is through a secure online access site where you can share relevant and up-to-date information. Almost every financial planner offers a "client portal," and so do popular sites like Dropbox and Sharefile.

4. Observe. 


McClanahan recommends that your surrogate start with just observing the monthly financial activities. This can mean receiving duplicates of the bills or periodically logging into investment sites. Alerts could be set on various accounts if spending exceeds a certain limit. There are several money management sites, like quicken.com and mint.com, that can also give a surrogate online access to monthly statements and spending alerts.

5. Participate. 


The activity of the surrogate can eventually be increased to attending annual meetings with your insurance agent, investment adviser, attorney, and accountant. If you have a financial advisor, it would be helpful to bring your surrogate into your quarterly or annual updates. This way the surrogate can begin to build a relationship with the advisor, which will greatly smooth the transition to the surrogate working conjointly with the advisor in making all your investment decisions.

The surrogate can gradually begin to assist with the monthly bill paying. Eventually, this would culminate in the person taking over all financial decision-making and responsibilities like purchases, bill paying, taxes, and investment decisions.

6. Monitor the surrogate. 


Having a system of checks and balances by appointing someone to monitor the surrogate may help you be more comfortable allowing a surrogate to take over your finances. The monitor might be another family member. It might also be your attorney, accountant, or financial planner, whose fiduciary responsibility would be to you.

Planning for the transition of our financial caretaking is one more aspect of preparing for old age that we are reluctant to even think about. Yet without it, we must eventually accept options imposed on us by family or the court. This planning is crucial in order to take care of yourself and your finances in the ways you choose. 

Rick Kahler
Advisor
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Rick Kahler, MSFP, ChFC, CFP is a fee-only financial planner, speaker, educator, author, and columnist.  Rick is a pioneer in integrating financial planning and psycholog ... Click for full bio

Advisors: How to Prepare Before Calling an Agency

Advisors: How to Prepare Before Calling an Agency

Written by: 

You’ve read my other posts:

Related: Should You Work with a Marketing or PR Agency, or Neither?

Related: There's No Point in Paying for Outside Advice If You Have No Intention of Listening to It

And you’re finally ready to talk to a marketing or PR agency.

Or are you?

I’m amazed how many prospects contact an agency without any advance preparation whatsoever. It’s not just that they don’t know what services the agency offers. The real issue is, they can’t even explain why they’re calling in the first place.

You might be raising an eyebrow at my suggestion that you actually need to prepare before calling a vendor. Don’t. I want to help you maximize your time, and potential investment.

Here’s why: The best way to use a vendor’s time during an initial call is to conduct a mini-discovery session. At FiComm, we will ask: What is your vision for your business? How do your services address your market’s needs? Where are you headed as a company? What will get you to the next level? What marketing obstacles do you face? That information shapes our remarks, ensuring that everything we say will be directly relevant to you.

Many advisors find those initial conversations enormously valuable in their own right. They help clarify their thinking. But others feel put on the spot. They freeze. They respond in standard brochure-speak: “We were founded in 1984, we have four advisors, we serve 200 households with an average account size of $400,000.”

Or they say, “We were hoping you would tell us the answers to those questions.”

Well, that’s helpful.

Imagine you’re meeting a potential wealth management client for the first time. They have $700,000 in a brokerage account, $400,000 in a retirement account, two kids, a dog and a house in L.A. Great. You start by asking their goals for themselves, their money, and their family.

Puzzled, they tilt their heads and say, “We were hoping you would tell us.”

See what I mean? How can you possibly come up with a solution for clients who can’t even articulate their goals, or speak to their financial pain points?

The same is true for us vendors. Before we can help you, we need to know where your business is going and how you think marketing can help you get there. The answers don’t have to be “right” (and we’ll help you get there), but it you come prepared to participate, our conversations can be very fruitful. If you don’t—well, it’s hard to deliver value for you. We know we’ll constantly have to prove ourselves and remind you why you hired us.

“But, Megan,” some advisors say, “we’re not ready for that. We’re just trying to understand the basics. How will we learn if you don’t tell us?”

If you’re calling an agency just to get a general marketing education, then that’s what you’ll get—general information, most of it irrelevant to you, and lacking the specifics you’re really looking for.

So, don’t call an agency to be your marketing tutor. Instead, read. Advisors have never had better access to self-help insights and information—through trade pubs, custodian relationships, blogs, podcasts, other advisors and industry pundits. Be curious. Be inquisitive. If you hear something on a podcast that intrigues you, follow the host back to LinkedIn. Read what they write there. Email your questions. Attend a webinar. Be an active participant at industry events.

At some point, you’ll understand the basics. You’ll have identified your own issues. And narrowed down your questions. Then, finally, you’ll be ready to call an agency.

Instead of saying, “Tell us what we need,” you’ll say, “We need help with this.

Megan Carpenter
Marketing
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Megan is CEO & Co-Founder at FiComm Partners, LLC. Her team develops winning communications strategies for entrepreneurs in the independent advisory community, and busines ... Click for full bio