Attract Gen X/Y clients using debt management February 2017

Attract Gen X/Y clients using debt management Technology plays a bigger and bigger role for Gen X/Y consumers Many Gen X/Y consumers’ biggest immediate financial challenge is managing personal debt Free, publicly available tools (e.g. mint.com, personalcapital.com) allow clients to manage some of their own financial information like balance sheet and budgeting Debt management is an opportunity to provide differentiated advice for consumers along with those capabilities  

Agenda Review key debt management strategies How to use RightCapital tools to illustrate debt strategies Using debt management + RightCapital Leads to bring in younger prospects

RightCapital allows you to illustrate all three options Review of debt reduction strategies Avalanche approach – pay down highest interest rates first Pay the minimum each month to all debts except the one with the highest interest rate Allocate remaining $$ to the debt with the highest rate Mathematically, the quickest approach to getting debts fully paid off May not factor in emotional impact of keeping multiple debts on clients’ balance sheet Snowball approach – pay down smallest balances first Pay the minimum each month to all debts except the one with the smallest balance Allocate remaining $$ to the debt with the lowest balance Creates psychological benefit of seeing reductions in the number of bills received Not the optimal approach mathematically Allocate additional money to paying down debt Balance between paying down debt and saving for retirement. Need to incorporate debt strategy into the holistic financial planning. RightCapital allows you to illustrate all three options

How to use RightCapital tools to illustrate debt strategies

Sample slides with clients

Case Study - Meet the Bradys Mike and Amanda: Married Current ages: 31/29 Current debts: Car loan: $15,000 at 5% Credit card: $15,500 at 11% Credit card: $13,000 at 17%

What are the Bradys’ options? Avalanche approach – pay down highest interest rates first Pay the minimum each month to all debts except the one with the highest interest rate Allocate remaining $$ to the debt with the highest rate Mathematically, the quickest approach to getting debts fully paid off May not factor in emotional impact of keeping multiple debts on clients’ balance sheet Snowball approach – pay down smallest balances first Pay the minimum each month to all debts except the one with the smallest balance Allocate remaining $$ to the debt with the lowest balance Creates psychological benefit of seeing reductions in the number of bills received Not the optimal approach mathematically Allocate additional money to paying down debt Balance between paying down debt and saving for retirement. Need to incorporate debt strategy into the holistic financial planning.

Illustrating the value of the Avalanche approach #1 - Planners often say you need between 70-85% of your pre-retirement income to maintain your standard of living when your working days are over Use calculators and or software to help you understand your needs….by the way if you start a budgeting disclipine early on this makes it a whole lot easier when the time comes to figuring it out. #2 Most people claim benefits within the first few years of elidgbility – but in doing so they lock in a smaller monthyly payment for the rest of their lives. Claiming early also may lock in a smaller monthly payment for your spouse, if you die. What is the upside of waiting? #3 Married couples may have options that singles don’t. A breadwinner can file for benefits but suspend claiming them allowing the spouse to claim a spousal benefit while the breadwinner’s unclaimed benefit grows significantly. #4 - It’s a mystery for most people but you may have clues – how’s your health, what’s your family health history – check out on line longevity calculators such as livingto100.com and bluezones.com. #5 – if you wait to claim and die early, you end up with less in total than if you claim sooner – conversely if you claim early and live longer (generally into your 80s) you end up with less in total than if you claimed later #6 – a surviving spouse who You can illustrate the total interest savings generated by the strategy as well as how much sooner the client will be debt free

Lay out a clearly defined payment approach for clients

Using debt management + RightCapital Leads to bring in younger prospects

Bring in prospects through RightCapital Leads Use digital marketing to promote your Leads portal – create your free financial planning account for free

Create a connection using Debt Management When a prospect creates their account through the Leads program, the balance sheet and budgeting tools are immediately available. For Gen X/Y clients, you can immediately reach out to illustrate debt management options by enabling the debt management screen to demonstrate the value you can provide through advice and software Continue to engage clients by turning on additional planning capabilities such as investment review, college planning, and retirement planning.