The mature market is the single best large market. (There are other great markets, such as people with assets over $10 million or presidents of high tech companies, but these are very small markets and more difficult to penetrate). Here are the reasons that the 60+ market is so lucrative and attractive for financial sales (investment and insurance services):
1. People over age sixty total 44 million people, about 16% of the US population. But they hold well over half of the investment assets (I have seen estimates as high as 80%). This gives rise to opportunities for estate planning, long-term care, educational funding for grandchildren, and significant investment management fees. Younger investors do not offer this breadth of opportunities for financial professionals. Even life insurance is viable. Although only 3% of the live policies are purchased by this market by volume, the average policy is 4 times as large. This market is also the virtual exclusive market for “senior settlement” business.”
2. Very few seniors use the Internet as a substitute for your services. Unlike the 40 year old who goes shopping for his own term insurance policy and mutual funds on the Internet, more mature consumers tend not to do that. They may use their computer for email and news, but they are not using the Internet as a replacement for professional advice. (Regardless of what the studies show, do your own study and ask 10 seniors how often they use the Net and for what purpose). They do not have the following independent attitude held by many baby-boomers who perceive they don't need a financial advisor: "Why should I deal with you? I can buy no-load funds, get all the information I need from the Net, and buy no-load term insurance there too."
Mature consumers have been "around the block" and they value good advice. They do not possess the arrogance of thinking they can outdo you at your profession. They respect professionals as opposed to the boomer generation (the skeptical generation) that has its roots in overturning the professional establishment.
3. Mature consumers are NOT performance oriented. They will not complain about their portfolio rising 18% when the market is up 30%. You do not need to match some impossible benchmark. Mature consumers highly value the trust in the relationship and knowing that you look out for their interest. They want to preserve what they own rather than get rich. They make their decisions largely on how they feel about you, rather than a detailed analysis of your proposal. With older consumers, you do not sell product and product features and you do not need to have the best fund/policy/program/proposal. Older consumers buy you. Once you earn their trust, they hand over the money and tell you, "If you think it's good, then let's proceed."
4. Those who are retired have control of their wealth. Their money is not locked up in a 401(k), 457 or other institutional plan. They can make a decision to move $100,000, $500,000, or $5 million today.
5. They have greater incentive to take action. A 60-year-old does not have as much time remaining as a 40-year-old. Although I hear from some professionals that older consumers procrastinate in their financial decisions, there is a reason why that occurs, a reason that you can control. They procrastinate when they are not comfortable. They are most likely uncomfortable because they do not trust you. Why?
Because if you spend most of your time meeting with people age 40, the conversation that you have mastered will fail with a 60+ consumer. Working with mature consumers requires a different conversation that’s oriented around the person, not the product/service.
Penetrating this market will require a new mindset for some financial professionals:
1. Sell comfort and security. Do not sell opportunity. Older consumers want to protect what they have accumulated. Show them how to do that and FEEL comfortable, and you have a client for life.
2. Drop all jargon. I never even use the phrase "fixed annuity." I ask, "Do you have the type of annuity where the principal is guaranteed but the interest rate has been falling over the last 10 years?" Even the simplest phrases that professionals use can be confusing to clients. And unlike some, who recommend that you need to confuse 'em to sell 'em, I find this advice to be nonsense. I have gathered more assets over the years by being crystal clear in my communication and having my client understand 100% of my language.
3. Forget about "closing" these investors. Your presentation must be strong from the first word. A strong presentation flows naturally into an easy close, "If that makes sense, Mr. Jones, what we need to do is complete one of these forms and ..." If you haven't sold yourself and built trust, the more difficult the close and the faster your prospect will be gone.
4. DO NOT assume that mature consumers want to leave a big estate and provide for their children. They want to provide for themselves FIRST. So sell current benefits—more income, a guaranteed return, insurance protection for the living. I had an insurance agent gush to me about a variable annuity that guaranteed a 6% annual minimum return if held until death. That's great, but most mature consumers couldn't care if the return was 100% a year if they need to die to get it.
In other words, if you think estate planning is about saving estate taxes, you will spend many years in this business earning far less than you could. Stop talking about saving the kids estate taxes and sell LIVING benefits:
• Charitable Remainder Trusts and Charitable Gift Annuities to convert assets to income
• Family Partnerships to protect assets from creditors
• Private Annuities to keep assets in the family
• Qualified Personal Residence Trust to keep the family house in the family
• Foundations to help clients implement their values
5. Obey their experience. If your prospect's next door neighbor told him that whole life is a bad deal, then DROP IT. Logic is your worst tool with mature consumers. I call this phenomenon "the sample of one." The older we get, the more our personal experience becomes the absolute truth. A single personal experience, that one data point, will outweigh the realities of millions and all the facts you can deliver. Educate prospects only when the prospect is open to it, not when they have already told you about "their truth."
Obey these few rules, and you will find the mature market financially and emotionally rewarding.