Why a Sound Mind Matters

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2018

2 Why a Sound Mind Matters

Financial advisors are fluent in providing guidance on complex financial subjects, and they can expand their impact on clients’ wellbe-ing by discussing topics such as their clients’ social lives and mental acuity. These components of a sound mind can have important im-plications for financial security in retirement—and advisors can offer substantial value by helping clients understand and plan for them.

As people age, many experience cognitive declines that can make them more vulnerable to fraud and poor financial decision-making. But clients can take steps now to retain their mental acuity. With your encouragement, they can embrace healthy habits that may help them stay sharp and secure their financial wellness into old age.

One way you might address mental wellness with your clients is to ask about their social life. A healthy social portfolio typically includes friends, family and rewarding social activities. Whether a person has regular coffee dates with friends, attends religious services or volunteers with a local nonprofit, these interactions can boost brain health and provide a network to rely on in difficult times.1

Researchers at the Stanford Center on Longevity have found healthy social portfolios are just as important as strong financial portfolios, but many Americans’ social ties are suffering. In the past 30 years, the number of people who say they lack even one close friend has tripled, and only one in three people reports they interact weekly with neighbors.2 Those between ages 55 and 64 may face the most risk for social isolation, as members of that age group re-port declining support from family and friends and less community participation than in the past.

4535% of adults ages

suffer from chronic loneliness

+ (42.6 million3)45 29% of married older adults feel lonely

51% of never-married older

adults feel lonely

4535% of adults ages

suffer from chronic loneliness

+ (42.6 million3)45 29% of married older adults feel lonely

51% of never-married older

adults feel lonely

4535% of adults ages

suffer from chronic loneliness

+ (42.6 million3)45 29% of married older adults feel lonely

51% of never-married older

adults feel lonely

Advisors can strengthen relationships by helping clients understand how to maintain their mental — and financial — acuity

The role of a strong social portfolio

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Advisors can strengthen relationships by helping clients understand how to maintain their mental — and financial — acuity

You can also play a direct role in boosting your clients’ social portfolios by hosting a client event such as a

• Workshop for estate planning

• Client-appreciation dinner

• Simple wine-and-cheese event

Retirement sometimes contrib-utes to feelings of loneliness. As people age, leave the workforce and spend more time at home, they often withdraw from social groups and feel more isolated.4 Help your clients avoid letting themselves simply drift into this situation, as researchers have found that social isolation is linked with cognitive de-cline.5 Feelings of loneliness can diminish emotional wellbeing and mental sharpness, which in turn can hurt an individual’s ability to make productive financial decisions.

Consider regularly asking a few questions to get a sense of your client’s social landscape: Does the person have family or friends living nearby? What are their hobbies? If the client is on the cusp of retire-ment, what plans do they have once they stop working?

If a client’s social portfolio needs some attention, encourage them to connect with others through com-munity groups, religious services or simply chatting with neighbors. Research shows volunteering is another powerful way to connect with community, and volunteers often experience health benefits.

One study found nearly two-thirds of senior volunteers felt less isolat-ed after they started volunteering — and even more reported feeling fewer symptoms of depression.6

You can also play a direct role in boosting your clients’ social portfoli-os by hosting client events. Consid-er putting on a workshop for estate planning, a client-appreciation din-ner or a simple wine-and-cheese event that gets your clients mingling with potential new friends — and strengthening their relationship with you along the way. If you invite your clients to bring a friend, these events can further serve as a great way to prospect for new clients.

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As with the rest of the body, maintaining a healthy brain — a key ingredient in smart financial decision-making — requires regular exercise. One of the best ways your clients can increase their mental agility is to continue learning.

Encourage your clients to be curious and to try new things. Lots of activities will do the trick — they can take a painting or dance class, try a new way of cooking, work on puzzles or practice a new language with a language-learning app.9 Reading is another great way to keep the mind sharp.

Support clients’ mental fitness by pointing out what they’re doing

right. For example, if a client men-tions a class they’re taking, a new interest or a favorite author, men-tion the cognitive benefits of such activities — and encourage them to keep pursuing them.

At first blush, discussing the details of your clients’ social life and mental acuity might seem far beyond your job description. But helping your clients prepare and strategize for the future is a big part of your work. Addressing the connections across your clients’ brain function, mental health and financial health can deepen your relationships and help your clients live long, fulfilling lives.

Action steps Educate your clients about

the importance of a strong social portfolio — an important factor in brain health, which supports good financial decision-making.

Host client events to give your clients a chance to connect socially while they hear from a professional.

Prepare clients for the possibility of hearing loss, which can hurt their social portfolio and create ongoing medical expenses.

Learning is a key tool for preserving mental sharpness, so encourage your clients to be curious and try new things.

1 Amanda Cook Maher et al, “Psychological well-being in elderly adults with extraordinary episodic memory,” PLOS ONE, October 2017.

https://protect-us.mimecast.com/s/b9H5C2kg95ip7MD05unhTHt?domain=journals.plos.org” \t “_blank” https:// journals.plos.org/plosone/article?id=10.1371/journal.pone.0186413

2 Amy Yotopoulos and Jonathan Streeter, “Social Portfolios Are Just as Important as Financial Portfolios,” Stanford Center on Longevity, 2017. longevity.stanford.edu/wp-content/uploads/2018/05/Social-Portfolios.pdf3 AARP, Loneliness Among Older Adults Fact Sheet, September 2010. aarp.org/content/dam/aarp/research/surveys_statistics/ general/2012/loneliness-fact-sheet.doi.10.26419%252Fres.00064.002.pdf 4 Adnan Bashir Bhatti and Anwar ul Haq, “The Pathophysiology of Perceived Social Isolation: Effects on Health and Mortality,” Cureus Journal of Medical Science, January 2017. https://protect-us.mimecast.com/s/niOwC31j95hpZnrWDuq3Ap2?domain=ncbi.nlm.nih.gov” \t “_blank https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5367921/

5 Bryan D. James et al, “Late Life Social Activity and Cognitive Decline in Old Age,” Journal of the International Neuropsychology Society, November 2011.

6 Kim Hayes, “Senior Volunteers Reap Health Benefits,” AARP, July 27, 2017.

7 Debbie Clason, “Emotional effects related to untreated hearing loss,” Healthy Hearing, September 2012.

8 Paul Dybala, “Hearing Aid Prices,” Healthy Hearing, October 2016.

9 Stanford Center on Longevity, “Expert Consensus Statement on Brain Health.” longevity.stanford.edu/expert-consensus-on-brain-health/, September 2018.

The research, views and opinions contained in these materials are intended to be educational, may not be suitable for all investors and are not tax, legal, accounting or investment advice. Readers are ad-vised to seek their own tax, legal, accounting and investment advice from competent professionals. Information contained herein is believed to be ac-curate at the time of publication; however, it may be impacted by changes in the tax, legal, regulatory or investing environment.

Stanford Center on Longevity is not affiliated with GWFS Equities, Inc. or its parent company, Great-West Life & Annuity Insurance Company.

Great-West Financial®, Empower Retirement and Great-West Investments™ are the marketing names of Great-West Life & Annuity Insurance Company, Corporate Headquarters: Greenwood Village, CO; Great-West Life & Annuity Insurance Company of New York, Home Office: New York, NY; and their subsidiaries and affiliates, including registered investment advisers Advised Assets Group, LLC and Great-West Capital Management, LLC.

©2018 Great-West Life & Annuity Insurance Company. All rights reserved. B1016-SMWP-18867-1808 AM 567826-0818

Hearing loss is prevalent in older people, and it can take a heavy toll on communication and relation-ships. One in three people over the age of 60 suffers from life-diminish-ing hearing loss, but they typically wait five to 15 years before getting hearing aids. Years of poor hearing

can lead to isolation as social gath-erings become frustrating.7

Consider raising your clients’ awareness about the likelihood of one day needing hearing aids and help them prepare for the related expenses. Hearing aids typically run $1,000 to $4,000 and should be

replaced every five years; to many clients’ surprise, insurance often doesn’t cover them.8 Offer your clients critical health information through a workshop or client event that features a hearing specialist.

Promoting mental and financial fitness

Preparing for hearing loss