Closing Thoughts

Advising Forward

Four ways to restore client confidence and grow your practice in 2021

by Sri Reddy

Srinivas D. (Sri) Reddy is senior vice president, Retirement and Income Solutions at Principal Financial Group®, Des Moines, Iowa. Visit

The past year brought no shortage of worries for many Americans—including social and political unrest and the global pandemic. Adding to these external stresses, many faced a major hit to their financial lives, too. According to our recent Principal® Retirement Security survey, 64% of workers say COVID-19 had at least some impact on current savings and investing decisions, and 72% say it impacted their path to retirement. 1

With confidence rattled, people may be looking for reassurance and help navigating their way forward. As a financial professional, you’re in a unique position to deliver potential solutions. Try embracing one or all of these four ideas this year for extending optimism and encouragement to current clients or prospects.

Paint A Realistic Picture Of Retirement

People often mistakenly think spending will be consistent throughout retirement. In reality, it can be more like a barbell—front-loaded with expenses, followed by a dip, before rising again in late retirement. In early retirement, many people tend to spend more as they get into their groove. That may mean buying a new home or downsizing, which could come with significant moving expenses. Then for about 10 years, spending seems to level off before rising again in later years as aging can create a greater impact on medical expenses and additional long-term care costs.

Throughout retirement, everyone deserves to find satisfaction and happiness. Figuring out what that means for your clients is a great place to start. For instance, only 39% of workers feel at least somewhat prepared for imagining their life in retirement. So most will likely need some help determining what the next 20 or even 30 years look like for them.

With their retirement goals in mind, show clients how they can use guaranteed income to cover non-discretionary or essential expenses (medical, food, housing). Known as the retirement income flooring strategy, this concept allows your clients’ money to work harder and helps give them the financial freedom to cover retirement wants with non-guaranteed income sources (like personal retirement savings). Remember to look carefully at the two ends of retirement as these times have the potential for the most expenses. (This document further explains flooring strategy and other important retirement income strategies, which may be helpful to share with your clients.)

Don’t Discount Young People

Young people have more human capital than financial capital at the beginning of their careers. But that balance can shift as their finances grow. Recruit younger clients by offering perspective and optimism, which may be needed now more than ever. After all, clients don’t just look to financial professionals for financial needs. They fill a variety of roles: financial coach (50%), therapist (34%), consultant (22%)2. Find out what potential younger clients need most. Then help them create a plan and become more deliberate with their choices.

Important to note: When asked what financial advice they would give to their younger selves, more than three-fourths of retirees said they would start planning early1. By recruiting younger clients and sharing retirement planning insight now, you may be shaping their financial futures for the better.

Harness Innovation

The past year brought a lot of change and uncertainty, but with that came innovation. Financial professionals found new and different ways to connect with clients. According to our research, financial professionals adjusted communication in several ways, including: More phone calls (58%), emails (46%), and video chats (36%). Others embraced less conventional ways to reach out, particularly to their young clients, through text, mobile apps, and social media3.

Be the voice and advocate your clients and prospects need to help them gain greater confidence and connection...

It turns out those who got used to this new way of staying in contact may not want to go back. Fifty-seven percent of investors reported communication with their financial professional had undergone some change because of stay-at-home mandates, and 62% say they would entirely or partially maintain these new methods4.

This may be one of the pandemic silver linings for financial professionals. You now have new and different ways to connect with clients going forward. If you haven’t already, try some of the newer approaches mentioned above to help stay in front of clients and prospects.

Create A Community Among Your Clients

The pandemic has left many people cut off from friends and loved ones, feeling isolated and alone. The adjustments society has made to help contain the virus (closed schools, quarantine, and so on) have put a spotlight on loneliness as a growing epidemic. And, while practicing safe social distancing helps reduce the spread of the COVID-19 virus, it prevents us from connecting with friends and family in the same ways we have in the past.

Keeping up with and building new social connections may be one of the keys to combating loneliness and maintaining good mental health. And, with your access to a broad mix of people across your client base, you’re in a unique position to help your clients find meaningful human connections and opportunities to meet new people.

Try starting a virtual breakfast club or virtual events aligned with personal interests you can share—like a cooking class—you can transition to in-person when it’s safe. Consider inviting compelling speakers and local experts. You might be surprised how many of your clients start to attend and begin to bond with one another. Even more surprising may be an uptick in client retention and referrals that may come as a result from hosting these events.

While the spread of the pandemic and vaccine distribution still create some uncertainty, there are ways you can take charge of your practice and even grow it during the next year. Be the voice and advocate your clients and prospects need to help them gain greater confidence and connection.




1 – 1- Principal Retirement Security Survey, November (Q4) 2020
2- Natixis Global Survey of Financial Professionals, April 2020
3- Principal Financial Professionals Research, July 2020.
4- Broadridge Financial Solutions report, July 2020.
The subject matter in this communication is educational only and provided with the understanding that Principal® is not rendering legal, accounting, investment advice or tax advice. You should consult with appropriate counsel or other professionals on all matters pertaining to legal, tax, investment or accounting obligations and requirements. The information shown is not intended to provide any suggestion that you engage in or refrain from taking a particular course of action.
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