Some advisors aren’t confident discussing healthcare costs with clients
By: Karen DeMasters
Financial advisors need to learn more about healthcare and the costs it can impose on older clients in order to ease their growing concerns, said Tom Burmeister, vice president of financial planning at Advicent, a financial technology company based in Milwaukee.
Some advisors do not feel comfortable discussing the details of healthcare costs with their clients because they do not have the depth of knowledge they need, Burmeister said in an interview.
A recent survey of 1,000 Americans conducted by the Certified Financial Planner Board of Standards found that 54% of respondents felt high or very high levels of stress about their healthcare costs. And the cost of health care was the top financial concern for 41% of those surveyed. The pandemic has intensified that stress, Burmeister said.
“The uncertainty and volatility of this past year have strained Americans physically, mentally, emotionally and financially," Kevin Keller, CEO of the CFP Board, said when survey was released. "Given the impact of the COVID-19 pandemic across the country and the recent surge in cases, it is understandable that Americans are most concerned with the cost of their healthcare.”
Due to this fear, “advisors need to develop a serviceable level of expertise about what healthcare costs could do to their retirement planning. Financial planning is not just about livng expenses and life style, it also has to be about healthcare costs,” Burmeister said.
Clients’ concerns can be alleviated by walking them through the possiblities of what the costs could be. “For the average couple facing retirement, healthcare costs could be hundreds of thousands or even a million dollars,” he added, noting that technology can be used to show clients all of the potenial costs.
For many advisors, healthcare is not part of their basic education, Burmeister said. Some advisors educate themselves and some firms are now beginning to provide education on these costs.
“But some advisors might not delve into the subject with their clients because they are afraid they cannot answer all of the questions the clients have," he said. "Healthcare costs have increased more than other costs over the last decade, drawing attention to the subject.”
As such, he said, having a plan in place to address healthcare costs can alleviate a client’s fears.
-- via FA-Mag.com, published on February 17, 2021.