Effective Change

Effective Change

Habits are hard to break.

It’s even harder to make positive changes that create good habits. We’ve all said we wanted to set a new goal ― exercise more, eat better, read more, get to work earlier or spend more time with the family. I’ve failed many times at all of the above.

The secret behind effective change is repetition and focusing on a goal.

Many people who change do so with a mental picture of what the goal looks like. Instead of setting a goal to lose weight, it’s proven to be more effective to set goals such as running a 5K, achieving a thinner waistline or building stamina to play with the kids. It’s important to know where you are headed and the reward that will be there ― that keeps a person motivated, especially through the hard times.

Real change happens when we make incremental changes in our daily habits. Some people may be able to go cold turkey or jump in with both feet. If you’ve created permanent change with an all-or-nothing approach, congratulations! But, statistically, chances are those changes won’t stick. Breaking old habits and creating new, sustainable ones takes time and commitment.

The same goes for changing your financial services practice to an income planning focus.

For years, all of us in the financial services industry have been told to build a business with reoccurring revenue. The path of least resistance has mostly focused on a wealth management strategy ― accumulating assets under management and creating a steady flow of revenue from a percentage of those assets.

The problem is that strategy doesn’t allow for shifting demographics. We have to create more income, for a longer period of time, with less assets, than ever before.

It is a unique challenge, and it’s relatively new. Past generations had a stronger pension system and started taking Social Security sooner. The markets didn’t fluctuate based on sound bites circulated on the internet.

Retirement income planning is changing before our eyes. Nearly $600 billion worth of pension assets is currently frozen in the U.S. pension system, and current reports predict that Social Security will go bankrupt in 2035 without substantial change. Markets will continue to be affected by political climate, taxes, tariff structure and general market fluctuation.

We have to act, think and behave differently in order to help our clients retire securely.

We can’t go “cold turkey” with all of our clients ― the vast majority need advice and guidance on how to make sure they don’t run out of money in retirement. So how do you create effective change in your practice to address these changing demographics? The same way you successfully change other habits ― vision and repetition.

If the benefits of changing your practice to focus on income planning aren’t immediately clear, look at the risks of not doing so. In multiple surveys, investors have said they would leave their current financial advisor if Social Security or income planning advice is not offered to them within the next five to ten years. Changes to our practice need to happen in order to remain relevant.

Income planning is unique ― it takes planning, listening and alternative vehicles to reach the ultimate goal of a secure retirement. It must be done individually, one-on-one, which makes for the repetition. But it’s important to think strategically: How do we make the shift now, instead of when it’s too late?

Winning Strategy: Changing demographics continue to shape the needs of our clients. Make sure your practice reflects the coming needs of your clients, so they want to stay with you.

About the Author
Mike McGlothlin is a team leader, retirement industry activist and disciple of Indiana Hoosier basketball. In addition to being EVP of retirement at Ash Brokerage, he is a sought-after writer and speaker. His web series, “Winning Strategies,” provides insight and motivation for financial advisors in many forms – blogs, books, videos, podcasts and more. His latest book, “Free Throw for Financial Professionals,” is available now – learn more at www.freethrowsforpros.com.