Investing is not a dress rehearsal

A new trend is taking shape where successful financial advisors are focusing on people and their needs first before trying to just close the deal, and more consumers are working with retirement coaches to discover and understand their journey.

We know that people's circumstances vary and according to retirement coach Lynda Smith of the Refirement Network, most Baby Boomers fall in the following categories.

*Counting the days till formal retirement after 30 to 40 years with one employee.
*Stressed out from the pressures of corporate life and leaving before they should.
*Retrenched with an empty view of the future, blaming the current political situation.
*Retrenched and now an entrepreneur, asking "Why did I not do this sooner?"
*The husband can't wait to retire and the wife wants to build a career.
*The wife finds herself alone and needs to work, after the husband has gone off with a younger wife.
*The husband with second and third wives finds himself having to work to sustain the young children.
*Caught in the trap of poor investments and needing to work forever.
*Retired and bored with no reason to see a great future.

Broker's role - changing the picture

If you have been in the industry for a long time you will know that she is right. "Communication, self-awareness and planning are just three of the skills that can help you to change your picture. Time and energy is necessary to work on your life plan and to ensure that you land up as close to the picture you would like for your future," says Smith.

It is necessary to help people look at their circumstances, to build trust and then to start making suggestions regarding what to do with their funds.

Maintaining lifestyle

"What people need is a source of money to maintain their lifestyle. This implies the preservation of the real value of their capital for a period of up to 40 years. Preserving capital is reasonably straight-forward in nominal terms, but then inflation is guaranteed to destroy the real value thereof. This necessitates the assumption of some risk in order to generate a return net of inflation," explains Ian Lane, chief investment officer at Third Circle Asset Management.

Historically, the best place to find these returns has been equity, and with current equity valuations being on the low side, assuming some equity risk is likely the best way forward. However, serious downside risk exists in the short term, which also poses a threat to capital due to the timing of potential withdrawals, so going in with all guns blazing is not advised either.

Clients interests first

The only viable option is a long-term, moderately conservative strategy aimed at preserving capital, without sacrificing the possibility of inflation-beating returns.

There are a lot of different options. Isn't it time that you have a look at working with a Refirement Coach and a pro-active investment manager so you can help your clients to the best of your ability?