Jamie Hopkins: Why Your Clients Are Stressed, and What to Do About It
“Even if inflation is getting under control, people are still feeling the impacts of it,” Hopkins says. “In the debt world, you saw student loan repayment relief [changing], and people missing those payments. You’ve seen the total amount of credit card debt hit an all-time high.”
One silver lining, Hopkins says, is that Americans’ credit card debt is not at an all-time high when compared with the total amount of assets held in Americans’ wallets. Still, people are relying more on borrowing, and the higher prices of homes and all manner of goods and services is straining budgets.
“[The survey shows] 51% of workers are worried their retirement savings won’t last their lifetime,” Hopkins adds. “Forty-eight percent of people are worried about not having guaranteed income sources in retirement. [That reflects] concerns about the funded status of Social Security, pensions and other products and services out there.”
A Change Management Perspective
According to Hopkins, it is important for advisors to understand the potential disconnection between some of the big macroeconomic numbers reported in the financial media and the actual perceptions people are experiencing.
As the Guardian report emphasizes, it is well worth advisors’ time to check in with their clients to gauge their levels of optimism and pessimism. Especially when it comes to retirement, perceptions can deeply affect peoples’ choices and their ability to enjoy (or not) their hard-earned wealth.
“Look, for people, as they retire, that’s the end of their work checks coming in. It’s the end of liquidity events,” Hopkins warns. “We aren’t going to get another shot at that. So, again, respecting [clients’] concerns is super important, and it’s really meaningful to have serious discussion and conversations around this.”
Hopkins further notes that, as people prepare for and transition into retirement, they move “from the current work state, to a retiring state, to a retired state.”
“The reality is that we are moving through big changes, going from a current known state to an unknown change state — to hopefully a state that looks very different, right?” Hopkins says. “It’s different expenditures, a different life, different experiences that we haven’t lived through before.”
Given the dynamic nature of the effort, Hopkins concludes, one powerful way to think about the retirement income planning challenge is “treating it like a change-management process, like a change management product.”
“Understand that we go through unknown areas and we are going to have to adjust to this over time,” Hopkins says. “How do we deal with the stress points? Treat it like it is true change.”
Pictured: Jamie Hopkins
