Author: Craig Simms

Author: Craig Simms


Money (NOT Estate) Planning

If we truly want to promote financial products to everyone, it’s time to remove the name estate from the term “estate planning.”


Democratizing Money Management

For many of us in the financial services industry, removing the fallback term “estate planning” may come as a shock. But the word immediately suggests wealth beyond the ordinary. Even dictionary.com’s first definition of the word “estate” says “an extensive area of land in the country, usually with a large house, owned by one person, family, or organization.” The Cambridge Dictionary’s second definition, “everything that a person owns when he or she dies” is more accurate, and it’s the definition that we should focus on as financial professionals. Yes, WE know that estate planning is good for anyone who has assets, but the name scares away potential clients who are in the market for wills, insurance, investments, and other financial products. Perhaps “money’’ and “legacy” are more inclusive and accessible words to use to position the concept of asset management for everybody.

 Why is it important to democratize money planning? The statistics on the general population show us:

  • 46% of adults in the US have a will in place (Gallup Survey); 72% of people in the same survey who identify as “nonwhite” do not have a will in place
  • 58 percent of Americans said they would grade the adequacy of their retirement savings at a C or lower
  • Fewer than 4 in 10 Americans have a financial advisor

How the Financial Industry Can Respond

Considering these facts, how can financial institutions support mass market households who need tools, products, and guidance to meet their financial goals and plan for their legacy? A good place to begin is to focus on the basics:

  • Help them grow money intelligently and safely prior to retirement
  • Assist them in protecting against the financial impact of an untimely death of breadwinners
  • Create an income plan in retirement
  • Create a basic last will & testament to help move money to loved ones and charities

Sudipto Banerjee, Vice President, Retirement Thought Leadership at T. Rowe Price, offers one possible solution to address financial wellness for the masses. “The retirement industry can act now to help close the [retirement savings] gap by encouraging employers to not only sponsor plans but to incorporate plan design levers, such as auto-enrollment and auto-escalation, and by offering financial wellness programs.”

The financial wellness programs that Mr. Banerjee mentioned should include a tool like an online last will & testament. To broaden the use of a will and associated end-of-life planning tools, they can be offered for free on employer platforms, online consumer learning portals and via financial advisors and agents as relationship building tools.

Leveraging a No-Cost Online Will as a Tool for Offering Appropriate Products to the Mass Market

Offering a will as a complementary legacy planning tool is an opportunity to democratize the way we offer our products to most Americans. Making the will broadly available to people through their employers, on the “learning” portion of your website, through your agent distribution channels or using social media to promote its availability helps to drive wide usage. Embedding questions and product offerings in the online will can drive direct to consumer and agent-assisted sales of products in a low-key, low-pressure environment. The will can also be a tool for social good with a section dedicated to planned giving. Imagine adding questions at the end of the will such as:

  • Do you currently have life insurance outside of your employer offering?
  • Are you interested in using life insurance to support your favorite causes?
  • Would you like to leave a portion of your assets to your favorite causes?
  • Do you have investments? If yes, what type?
  • Do you have a financial plan in place for retirement?
  • Are you currently working with a financial advisor?
  • Excluding property, what is the value of your assets?
  • Do you own your home, or do you rent?
  • Would you be interested in no-obligation financial advice?

Based on the answers to these questions, a company can engage with the client in many ways, including providing virtual financial advice, call center interactions or in-person consultation where warranted.

Offering a No-Cost Will — Everybody Wins

By providing a complementary last will & testament, the financial institution wins with additional sales and enjoys the side benefit of making money planning available to the masses while also promoting social good. The mass market client wins because they will be presented with products that can potentially meet protection, asset accumulation, distribution, and charitable giving needs. The industry has often talked a good game regarding addressing the financial needs of the mass market. Offering a last will & testament to everyday Americans is a great way to deliver on this promise.

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