1. Attract Gen X/Y clients using debt management
February 2017

2. 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

3. 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

4. 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

5. How to use RightCapital tools to illustrate debt strategies

6. Sample slides with clients

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

8. 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.

9. 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

10. Lay out a clearly defined payment approach for clients

11. Using debt management + RightCapital Leads to bring in younger prospects

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

13. 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.