A new survey suggests that financial advisors who discuss healthcare in retirement are more likely to keep their clients.
Columbus, Ohio-based firm Nationwide conducted a survey of 501 financial advisors based in the United States. The insurance firm found that clients are "terrified" of discussing healthcare costs in retirement, but if FAs can breach the barrier, they are more likely to keep their clients longer.
50 percent of the financial advisor's clients had over $250,000 in investable assets.
The survey, conducted by Harris Interactive on behalf of Nationwide this year, says that four in five advisors believe they may not have the knowledge to conduct these discussions well, but "while advisors don't sell health care or Medigap policies, they do need to help their clients create the income stream to pay for those costs."
Many financial advisors find talking about their client's health a difficult prospect, and only 30 percent felt confident doing so. 57 percent of an advisor's clients were reportedly not interested in discussing retirement healthcare options.
John Carter, president of distribution and sales for Nationwide Financial said:
"There are not enough advisors right now talking about future health care costs with their clients, but more will soon learn how -- or risk losing customers to an advisor who can."
It may be that clients do not realize how crucial it is to consider healthcare costs coming up later in life, and if you add this to an uncomfortable financial advisor, it may be that many people are left unaware of how best to save and plan.
Over half of advisors say they remind their uninterested clients of the importance of planning for healthcare -- and 37 percent say "they try to urge them to have the discussion" before the topic is switched. Only four percent insist on having "the talk," no matter how awkward.
"Advisors need to have these discussions with their clients," Carter says. "Especially since 49 percent of the advisors we surveyed believe they could be liable for not properly preparing their clients for the costs of health care in retirement."
For the average 65 year-old couple, healthcare costs can reach in excess of $240,000 over a 20-year retirement -- without accounting for long-term care. It may be a topic often swept under the table, but it is up to both financial advisors and investors to properly plan for retirement healthcare, no matter how reluctantly.
Image credit: Martin Smith