With the recent introduction of pension freedoms, you may have seen more clients wanting to take lump sums from their pension funds.
Often these clients will have visions of dream holidays, home improvements or treating their family when they realise they can take all of their pension fund in one go. But as you know all too well, that's not always the best thing for them to do.
After all, the money in their pension pot is supposed to help them fund their retirement. So while they may have thought about how they'd like to spend that money, they may not have thought about how long it may need to last them.
To help you in conversations about life expectancy, we've created templates, tips and videos to make sure you can support your clients.
Life expectancy is a cornerstone of planning for retirement
As an adviser, one of the most important questions you need to ask your clients at the start of your meeting is how long they expect to live. Although this can be a difficult question to ask, it's a vitally important one to ask clients planning for retirement.
On average, the UK life expectancy for those aged 65 is 18.3 years for men and 20.8 years for women. However, research shows that many people tend to underestimate how long they will live. And that could have disastrous consequences for their financial planning in retirement.
A client expecting to live for 10 years after retirement could find themselves surviving on very little money in their later years if they actually live for another 25 years. Without carefully considering their goals and expected life span, your clients run a real risk of outliving their pension pots.
Not sure how to raise the topic?
Life expectancy isn't something people generally feel comfortable talking about. Because of that, it isn't always an easy topic to raise with clients.
To help you introduce the subject, Aviva has created an email and tweet template you can use to get your clients thinking about this before they meet with you.
The email also contains a link to our short animated video. At only a minute long, the video gives your clients a glimpse into the future. It explains in simple terms why their pension pots may have to last longer than they perhaps expect.
Five top tips for that awkward life expectancy conversation
So now you've got your client's attention, it's time for that conversation.
Talking about life expectancy can be difficult, so Aviva asked renowned professor of behavioural science Paul Dolan to outline ways you could approach the topic.
Professor Dolan says: "You can integrate behavioural science into your client conversations, helping you discuss difficult topics like life expectancy more easily."
His simple tips can help you to demonstrate the value of your advice. Among other things, Professor Dolan explains how to pick your moment carefully and how to help your clients connect with their future selves.
How can you estimate your clients' life expectancy?
Aviva has created a free life expectancy calculator to help you estimate how long your clients' money may need to last them in retirement. It uses basic information like date of birth, gender and ideal retirement date to give an idea of life expectancy.
This simple tool can help you demonstrate the importance of financial planning to your clients. It also helps show that taking their entire fund at once may not necessarily be the right option for their circumstances.
Get more from Aviva
Aviva has a wealth of information to support you as you help your clients plan their finances in retirement. For more information, search "Retirement Spotlight" online or visit Aviva for Advisers.