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How to Making a Winning Elevator Pitch

A recent study by Natixis Global Asset Management shows that many investors have unreasonable expectations when it comes to retirement investing. While the study shows that strong demand for financial planning exists, it also sheds light on how advisors can fine tune their elevator pitch by describing how they help clients use realistic investing expectations to reach their retirement savings goals.

The study surveyed 1,050 U.S. investors and concluded that most Americans believe their investments must outpace inflation by 9.8 percentage points to save enough for retirement. Since 1964, inflation has averaged 4.2%, so that means investors must earn a 14% return, which is highly unlikely considering that the S&P 500 has generated an average annualized return of 10% over the past 50 years.

At the same time, only 56% of survey respondents say they are willing to take minimal risk to earn higher returns. In other words, most Americans expect to generate unreasonably high investment returns without taking risk, which means that many individuals will fall woefully short of reaching their goals.

Also noteworthy, 80% of investors say they make investment decisions by following hunches rather than by using established practices for investing. That means they are simply gambling with their retirement savings, which is a strategy that is highly likely to fail.

On one hand, the study is just one of many that shows most investors need the help of a professional advisor to succeed in planning for retirement and other goals. One the other hand, incorporating its key points in an elevator pitch can be a persuasive strategy by helping advisors avoid a common pitfall: failing to provide practical results of financial planning.

For example, some advisors’ elevator pitches may be limited to simply saying that they provide retirement planning and investment advice. Unfortunately, the statement doesn’t emphasize the practical benefits of clients working with an advisor.

Armed with recent data on Americans’ attitudes toward investing, however, advisors can make their sales pitches more compelling. To start off, they can state that most Americans have unreasonably high expectations for investment returns and invest with hunches rather than using a thorough knowledge of investing to guide their decisions.

Advisors should add that the combination of unreasonable expectations and investing based on hunches means most Americans will fail to save enough to enjoy their retirements. Advisors can then add that they help their clients develop reasonable expectations for their retirement investments and establish appropriate savings rates.

At that point, they can then provide a brief example of a client that without corrective actions is likely to have a substantial retirement savings shortfall. To make the example compelling, the elevator pitch should estimate the size of the shortfall and illustrate how the advice resulted in the client creating an appropriate savings strategy that is likely to produce an adequate retirement nest egg.

The strategy could include having the client plan for an investment return based on the historical results for the S&P 500 and increasing their deferrals to their preferred retirement plans. Either way, the goal is to emphasize how the client’s retirement savings outlook improved drastically as a result of the advisor’s advice and how the client now has peace of mind from knowing that his or her investing program is finally on track.

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