HOLLYWOOD, Fla. -- Roughly one-third (34%) of the $53 trillion in U.S. household wealth is held by a home headed by someone who is 65 and older. And that percentage is doing nothing but increasing as America's average age climbs, says Marcia Larson, director of annuity product and business development at CUNA Mutual Group. Larson spoke at the BISA annual conference on Thursday.

Advisors should take note of this demographic, as well as its changing needs. "This is a huge opportunity but we have to get it right," she said during her presentation, "Older and Wiser: The Psychology of Serving Clients as They Age."

She urged the audience to keep these factors in mind as they serve the older demographic:

  • The brain changes as people age, becoming less "fluid" and more "crystalized." The means older clients will have a harder time accepting and understanding new ideas. But that's not all bad news, she says, because a more "crystallized" intelligence means they will be more certain and confident in their decisions. She said the peak age for decision-making, where fluidity and crystallization are at their optimum combination happens at 53, on average. Then it drops some 30% until age 80, at which point many clients will understand less than one-third of an advisor's recommendations.
  • That confidence they win with age comes with a caveat, Larson notes. They can become overconfident, which is part of the reason why older Americans fall victim to financial fraud, to the tune of about $3 billion a year, Larson said.
  • They also are more patient, which means they don't necessarily need immediate payoffs with their investments. They're more comfortable with the idea of staying the course and looking for rewards down the road. And she reminded the crowd that if in the early years of retirement, they indeed may have another 30 years to plan ahead for.
  • They grow more optimistic and have a brighter view of the future than younger clients.

Those trends continue throughout life. In fact, she noted that the generation older than the baby boomers, the "silent generation," or those born from the mid-1920s to the mid-1940s, can be a very lucrative segment that is often ignored.
She said advisors need to adjust their sales process to incorporate these ideas to better appeal to older clients, whether the boomers or the silent generation. She also suggested bringing the children into the discussions, as well as having older clients officially name someone they trust before their skills falter so that person can step in and make financial decisions for them if necessary.

It's an opportunity, she says, that still has much potential. As one data point shows, 41% of those 64 and older say they feel as though they’ve been ignored, or "treated as invisible," she said.

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