At SAIFAA we’ve always guided our independent financial adviser members to view financial planning in two distinct phases. Clients are either in the accumulation phase of managing their wealth, or the decumulation phase.
Covid-19 has not changed the way that we as SAIFAA guide our members; if anything, it has shone a spotlight onto the importance of simplifying the process and deepening the engagement of our clients, and their families, with their financial plans and their financial future.
Our member IFAs are able to separate their client base into one of these two distinct phases that, even more so in these challenging times, require decidedly different approaches – both of which are supported by our unique CPRP® Designation Program.
Accumulation Phase Clients
This is the slightly easier of the two phases. These clients are still economically engaged and generating an income. We ensure that our SAIFAA members are suitably equipped to provide the following accumulation advice and guidance to their clients:
- Advising them on how to manage their long term financial planning going forward after reviewing their current holistic investment situation post-Covid-19.
- Considering the possibilities of earning additional income post-retirement. What talents do they have at their disposal? Discuss the possibility of extending their retirement date and what you and your practice have planned for them during this journey. (i.e. 50+ Program)
- Talk about how their children and family are going to add value towards their journey ahead and what roles they will need to assume (see: Family Matters – Explaining an Estate Plan)
- Discussing the reality of current ageing parents and family, all of whom are part of this future challenging period. Including aspects such as the costs of frail care and retirement accommodation (see: Frail Care – The Cost of Comfortable Living)
Decumulation Phase Clients
This is a more problematic sector of our IFA members’ client base (between 25% to 60%), as many of them have probably had up to 8 years of ‘flat-line’ returns on their living annuities before the impact of Covid-19, downgrades & offshore investment structures etc.
Many have not yet been forced to think of the choices that will soon become a reality. In this decumulation phase our members are provided the following guidance for their clients:
- Assess their current retirement investment capital structure including their residential situation.
- Analyse their current health status. This must include ailments and chronic impairments that will inform suitable ‘tools‘ that should be considered for the future.
- Discuss the costs of frail care and how that is going to be considered as part of current and future retirement accommodation challenges (see: Frail Care – The Cost of Comfortable Living)
- A review, if applicable, of their children’s situation from a financial support perspective (both locally and overseas)
- Discuss, from a Certified Post Retirement Practitioner [CPRP®] perspective, some of the human advisory guidance aspects that need to be considered. (i.e. compassion, sympathy and understanding)
- Share with them some of the products and services that our members will be learning about later this year (at the planned SAIFAA Post-Retirement Investment Planning ‘Tools’ Workshop) that could be considered for their family’s post-retirement journey ahead.
SAIFAA has launched a world-first Certified Post Retirement Practitioner [CPRP®] Designation Program. This program equips our members with the expertise to advise and guide clients and families towards a better understanding of the journey towards and beyond retirement. You can find out more at https://saifaa.co.za/cprp/