The Retirement Boomerang: A New Vocabulary of Financial Services

Happy seniors walking on the beach.

Really big, awkward type.

Disclaimers-lots and lots of disclaimers.

For years, art directors, designers, copywriters, and anyone else who cares about doing good work has despaired as financial services projects came sliding across the desk. Now, don't read this in the hope that I'm going to tell you that unimaginative clients, old eyes, and compliance departments are going away. They're not. But things are going to change.

The reason is the 78 million baby boomers who are nearing retirement (see the chart on page 68).

For more than two decades, we've been talking with boomers about accumulation. But as more and more of them reach the top of their peak earnings years and start down, agencies, clients, financial advisors, their customers, and their prospects are all going to need an entirely new visual and verbal vocabulary. The conversation will need to be about spending the money that boomers have saved.

Consider that mountain metaphor. Ask anyone, "Why do you climb a mountain?" and the answer will be, "To get to the top."

How many of those boomer clients, or their guides, know that 80 percent of accidents happen on the descent? (Read John Krakauer's Into Thin Air or Joe Simpson's Touching the Void.) Of those 78 million boomers, the average climber, according to the GAO, has only $150,000 net worth.

Which means he or she-that average climber-is in trouble. This isn't news. But it is a definition of the challenge to our industry: Boomers aren't making the necessary decisions to guarantee their security for the rest of their lives; how do we help them?

Most, because they simply don't have enough money, will need guarantees and protection. They'll need products like long-term care insurance and living-benefits riders on variable annuities. They'll need new products like living benefits on a mutual fund, without having to buy a variable annuity, in return for paying 25 basis points.

So how do we get them to make the decisions to buy these products?

Remember, this is the generation that defines itself by independence. Read Tom Brokaw's Boom!, any number of AARP studies, or Age Wave research, and you'll see consistent themes:

* Lack of trust in authority figures

* Avoidance of decisions

* Redefinition of what retirement actually means

Look at divorce. The boomer divorce rate is many times that of the Greatest Generation. Decisions such as whom you'll marry and stay with for the rest of your life don't mean much any more. They're temporary. They're a choice, not a decision.

Choices vs. decisions

The accumulation phase of boomer lives has been a string of temporary choices. "If I don't like this mutual fund, I'll sell it and buy a different one." The machine that delivered accumulation products to the boomer audience reinforced this attitude by pitching features and benefits, led by the financial advisor. "Don't worry, this isn't permanent-when something better comes along, you can change your mind and we'll pick something else."

The deccumulation phase is going to be different. Boomers will have to make decisions, not choices, because the products that work to provide income on the downward slope of that mountain don't allow a string of choices without losing the accumulated assets.

The choice is the plan, the decision is the program.

The choice is the dream. The decision is the action.

Everything we do, every conversation we have with the boomer audience, will have to be focused on moving them from choices to decisions. The finality hits at the core of everything that boomers use to define themselves. And the inability of features and benefits to do the job hits at the core of everything the financial services industry has done in the past.

At the center of all this change are the financial advisors. In the past two years, our agency has read article after article in the trade pubs, and conducted hundreds of interviews in which it found that advisors are saying "Stop!" to the wholesalers and corporations that throw features and benefits at them. What they want instead are concepts that explain to their boomer customers why it's finally time to make a decision. They want tools that can reach inside boomer minds that have been adjusted by decades of behavior. Tools that can reset those minds from "I can make choices until I die" to "I have to make a decision that I can't change."

It's not as if there are options. All the Monte Carlo simulations tell us that those average Americans climbing up the mountain are going to run out of money on the way down unless they decide now to buy products with guarantees.

Just look at stock market performance during January 2008. If you had been taking money out of your portfolio-deccumulating-you would have seen the base of money that you're relying on for later in life shrink faster than its ability to recover and produce income for you. A prolonged downturn in the performance of the markets would, quite simply, make it impossible for millions of under-saving Americans to retire.

Finding a solution

Transamerica asked us to help them solve this problem. They wanted a concept that would appeal to the business-to-business audience, the business-to-sales force audience, and the business-to-consumer audience. It would have to be a concept that would:

* Create trust with boomers

* Go beyond a product with features and benefits

* Generate a full campaign of materials that would take both the advisor and boomer client from choice to decision

So we invented Retirement Boomerang. Above is the basic concept.

But the concept is just the beginning. As a third-party provider through three distribution channels (wirehouse/regional, bank, and independent financial planner), Transamerica needed to understand all its audiences. The map below shows how those audiences align with Transamerica's business-to-business and business-to-sales force field staff. Though each of the three distribution channels mapped similarly, their behaviors were different and required unique messaging and materials.

For Retirement Boomerang, we focused on links G and F, because the financial advisor is the key influencer in the client relationship. To move boomers from choice to decision, we had to have the advisor on our side.

Next, we used YMM Cycle Selling (see sidebar on page 70) to plan a campaign of materials that would lead a financial advisor to recommend a variable annuity, and for his/her client to buy one. The program moves from the concept in its broadest form-Retirement Boomerang-to more and more specific messages, eventually ending in a worksheet that helps both the financial advisor and client make a decision about the right mix of products to provide lifetime income.

Results

Market response to Retirement Boomerang has been excellent. Wholesalers are excited about a full program with multiple pieces centered on a core idea. Financial advisors finally have the materials to build their businesses by leading the conversation boomers are avoiding. And though specific numbers are proprietary, Retirement Boomerang is working its way into Transamerica relationships across the world.

Retirement Boomerang is a new visual and verbal vocabulary for having financial conversations about making decisions. It's an elegantly simple idea with no pictures of happy seniors on the beach and fewer, shorter legal disclaimers because we seldom talk about products. Yes, there's large type. We are, after all, planning to be read by millions of old eyes.

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