eMoney New Feature Review
eMoney added a new feature recently that is designed for advisors to give their clients peace of mind when it comes to a common fear of outliving their money. In this post, I’ll outline how to use this new feature with clients, and also point out when you might not want to use it.
This new feature, called Longevity-Risk Analysis, is an add-on to eMoney’s Decision Center. What I like about this new feature is that it’s basically just enhancing the current version of the Decision Center that clients are already used to seeing. It’s still a simple and easy way to visualize a client’s retirement with toggles that you can turn on and off to see what sort of impact decisions they make today could have on their future.
We typically plan to age 95 in our retirement plans for clients. But often, when we are in meetings, the client will assume they won’t live that long and ask to see the projections only to age 85 and see that they have plenty of money to last until 85 and not worry. But, on our end, we have to think about what happens if they do live to 95. We need to plan conservatively and make sure that they’re going to be ok, no matter how long they live.
Easy to Understand and Facilitate Discussions
This new add-on to eMoney’s offerings makes it really easy for the client to see exactly how their money is expected to perform each year. The Longevity-Risk Analysis assigns a probability of success to each year and also color-codes it so it is really clear and anyone can understand it. It’s an easy way to show clients what can happen with their money in later years and how quickly things can change.
eMoney has designed this interactive experience to help facilitate critical conversations and educate advisors and their clients on the often-surprising life-expectancy statistics. We have found this to be an invaluable tool in our client meetings.
When to NOT use the Longevity-Risk Analysis with Clients
If I’m in a meeting with a client where we’re reviewing their eMoney plan for the first time and their plan doesn’t have a high probability of success, I wouldn’t use the Longevity-Risk Analysis at this time. The reason why is because if we have an unsuccessful plan, I want to ease clients into understanding that they will most likely have to make some changes in order for their plan to be successful. Showing them, up front, this page with a lot of red could really discourage them or even turn them off from having meetings in the future.
Now, obviously, I’m going to have to tell them that changes are going to be needed, but this feature could make them feel like there’s not a lot of hope for their plan. We have seen in our client meetings, that there are better ways to break the news to them.