MetLife Report on Behavioral Strategies Urges Financial Advisors’ to Engage Their Clients’ on Income, Not Assets

To better help advisors understand how behaviors impact their clients’ decision-making, MetLife announced today the availability of a new report, Engaging Clients in a New Way: Putting the Findings to Behavioral Strategies to Work. The report focuses on helping advisors shift the conversation from “accumulation” of assets to the distribution of said assets into income as clients near retirement.

“Financial advisors need to help clients understand that the financial mindset they possessed while saving for retirement, does not translate when they have to become their own income provider during retirement,” states Joseph W. Jordan, senior vice president, Behavioral Finance Strategies, MetLife. “There’s a delicate balance of logic, emotions, experience and intuition that advisors today must incorporate into their practices to inspire action and confidence in their clients so they can act.”

The report examines behavioral finance in the decision-making process. As an example, “buying low and selling high” is a logical decision, but as evidenced following the financial crisis of 2008, very few can say that they actually behaved accordingly. “It becomes the task of the financial advisor to help understand and manage such behaviors, recognizing that their clients will base their decisions not only on what is sound, but also on how it makes them feel. In short, to grow and develop their businesses, advisors need to understand the clients’ emotions, help them come to decisions on their own terms, and inspire confidence so their clients can act on their best intensions,” added Jordan.

Putting Behavioral Finance to Work

To facilitate the process, MetLife offers a general questionnaire for advisors to complete with their clients which sheds light on their clients’ income mindset. MetLife also offers a similar tool for consumers – MetLife’s Income Selector – available on www.metlife.com. The tool takes individuals through a series of questions that uncovers attitudes towards traditional investments and guaranteed sources of income and lets them see, from their own answers, what products and strategies might be appropriate for their unique situation. Results from the Income Selector can be printed and shared with an individual’s financial advisor, or a link is provided to contact a financial professional to discuss specific financial products.

As Jordan states, “Our research and industry research shows that when consumers are part of the process, they are much more likely to feel informed and empowered to take action to address their retirement income needs.” According to a 2009 LIMRA research report, a sales approach where the client’s feelings were addressed first and then followed up with facts, as opposed to the “fact-find and analyze” method, led to a 29% higher likelihood to buy after experiencing the process.

For a copy of the study, Engaging Clients in a New Way: Putting the Findings to Behavioral Strategies to Work, log onto www.metlife.com/behavioralfinance.

MetLife is a subsidiary of MetLife, Inc. (NYSE: MET), a leading global provider of insurance, annuities and employee benefit programs, serving 90 million customers in over 60 countries. Through its subsidiaries and affiliates, MetLife holds leading market positions in the United States, Japan, Latin America, Asia Pacific, Europe and the Middle East. For more information, visit www.metlife.com.

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