Beyond “At Retirement”– Financial Planning for Generation X & Y

by Niamh O’Keefe

It’s easy to see the value in financial planning for those approaching retirement. From a financial capital perspective, clients are at their peak potential and there is certainly income to be made. But what happens if we look beyond the immediate income potential and take a longer term, holistic view of the financial planning lifecycle?

In my experience, younger clients generally have a more evolving, complex set of planning needs. The emphasis moves from their balance sheet to cashflow. Life events such as marriage, children, return to education, career changes, the purchase of a new home, illness, inheritance or the starting of a business are all major financial milestones. Appropriate financial planning can give a client the confidence to navigate this ever-changing journey.

Holistic Planning

In my experience, clients often face the most financial strain in their 30’s and 40’s, so the merging of a client’s life plan with a strong financial plan leads naturally into an investment plan. Steering clients in their investment decisions at this time will make a huge impact not just on their financial future but on their lives overall.  

Lifetime planning certainly calls for a depth of knowledge beyond pensions, particularly as financial planning moves away from product selling and toward a holistic model. Life Assurance and Serious Illness products are ever evolving, making provisions for changes in life expectancy and medical advances. An advisor needs to look beyond cost comparison when advising on products. It is vital that we as advisors can analyse any shortfalls in income protection, health insurance and life assurance to ensure our clients are fully covered.

My Own Experience With Income Protection

When my husband went through open heart surgery, our four children ranged in age from 4-14. The difference a combination of income protection and serious illness insurance made to our family is impossible to quantify. We had the peace of mind that comes with knowing that we could both take time off from our careers and reassess our decisions after he’d healed.

Charging Models For Younger Clients

A move away from a commission-based fee structure towards a pay-as-you-go model can certainly work for some clients who want a snapshot in time. But for clients in their 30s and 40s who are cash-strapped with mortgages and children, will they be willing to pay this way for financial planning?

For younger clients, I suggest an AUM charging model. This provides a recurring income which is likely to increase as time goes by while allowing you to build a deep and trusting relationship with your younger clients.

Cashflow Modelling

Finally, cashflow modelling is a great tool for younger clients. In general, cashflow modelling software is powerful for life planning. It allows us to map clients’ futures in an easy to understand fashion. It lends itself well to the busy world of a younger, time strapped client where a screen share meeting is often more appropriate than one that is lengthy and face-to-face. The ability to map scenarios such as redundancy, inheritance, house purchases and future changes in income makes this ideal for the ever-changing needs of the busy young person.  

Courtesy of Niamh O’Keefe

Niamh has worked as a Paraplanner with Aon’s Individual Planning Team since May 2019. Previously she worked in AIB, one of Ireland’s leading banks since 2005. She is a Qualified Financial Adviser and is currently completing the final modules for the Certified Financial Planner (CFP) Accreditation.

She lives in Kildare with her husband and 4 children. They enjoy walks on the Curragh and mountain climbing with the family in their native Wicklow.

The views expressed in this article are that of this author and do not necessarily reflect the views and opinions of Voyant.