Whether you like it not, your clients have likely made a very important financial decision without your input. Look at their investment portfolios – the absence of long-term care insurance indicates they elected to self-insure. They may not even know they made a decision, but they have. As advisors, we may not be able to change their decision, but we can help mitigate their risk.
Long-term care events may be the most costly risk to long-term accumulation and retirement goals. However, 93 percent of Americans have decided to avoid the purchase of stand-alone protection. Likely, it’s too late for aging clients to consider this level of protection due to health concerns or an unwillingness to commit to high premiums.
If you’re like me, you carry larger-than-normal amounts of cash when on vacation. You might place some money in your significant other's purse, in a suitcase or in multiple pockets. It's as if we’re diversifying our vacation money, right?
Well, why don't we diversify our risk by placing some of our "emergency bucket" money in the right pocket? Using asset-based tools, we can create leverage for our clients. While the return on these types of assets is low, the advantage is to remain in a conservative position while providing additional protection.
The next time you’re looking at a portfolio and see no asset-based long-term care protection, ask your client if they have their money in the right pocket. I'm guessing that some of their portfolio is designated for future, costly medical events. Make sure you match up their assets with their risk and place the money where it can create the most leverage. Call Ash Brokerage for strategies to make it happen.
© 2018 Ash Brokerage LLC.