Fear, Uncertainty, and Doubt: A Behavioral Perspective on the Pre-Retiree

Today's pre-retirees can be forgiven for sometimes feeling as if they've been yanked from an investment path characterized by confidence and optimism and exiled to one designed to maximize anxiety and minimize trust. Given this environment, the effectiveness of financial service providers depends not only on managing pre-retiree assets but also managing -- and understanding pre-retiree emotions, which can seem as anxious as the last decade's markets, in fact, successfully addressing the emotions around finance in the early days of a retirement discussion may be the single most important factor in developing trust: the difference between a consumer taking action and doing nothing at all. These steps are placed in the emotional context inhabited by many of today's consumers: 1. Ask clients to define their assumptions. 2. Ask clients to define their goals. 3. Ask clients about their assets. To work effectively with today's pre-retirees, financial providers need to embrace techniques that engender confidence and control right from the beginning.