I have a brother-in-law that went to West Point and continues to serve on a limited basis in the National Guard even though he is getting close to retirement age. After serving in the military, and receiving numerous medals and awards, he attended law school resulting in a very successful career. He remains in close touch with his classmates, most of whom have also had very successful careers, even serving in senior levels of various Presidential administrations. Clearly the backgrounds of many of our Congressional representatives include a military background as part of their credentials. 

Sometimes those in the military are perceived as less affluent than the general population with many mistakenly forgetting that these individuals go on to have successful careers in civilian life. Additionally, veterans generally have the benefit of a pension on which they may rely. While for some it may not be a significant amount of money, it may influence how veterans and military families view their investments and future planning.

There are approximately 22 million veterans in the United States today (abcnews.go.com/Politics/us-veterans-numbers/story?id=14928136). That does not include the number of families that currently have or had a child in the military or a spouse with military service. In Spectrem’s ongoing monthly research with wealthy investors (those with more than $100,000 of net worth not including their primary residence), we found that approximately 28% of investors either had current or past military service themselves, had a spouse with current or military services, or a child with past or current military service. That’s roughly a quarter of potential households that a financial advisor, depending upon his practice, may or may not encounter during the course of his or her career.

It’s important for financial advisors to be aware of whether or not a client has a military background. Why? Well there are obvious reasons, such as including a pension in their financial plan. There are other reasons, however, that may not be as obvious.

First, investors with a military connection are more likely to use an advisor, specifically when trying to make important life decisions. Keep in mind that many in the military are comfortable with the concept of a plan, and therefore, military families are generally more likely to have a financial plan in place than other families. They are used to deferring to experts to make decisions, and therefore are looking for the financial advisor to provide that expertise. 

Additionally, military families tend to have a more conservative risk tolerance than those who do not have a military connection. While most households with a military connection still define their risk tolerance as moderate, a much higher percentage tend to be conservative investors than those without a military connection.

 

Overall, investors with a military background are potentially some of the best clients for a financial advisor. Loyal and generally willing to follow a plan, it is likely they will have a strong financial outcome for the long term. Spectrem’s report, The Financial Impact of Military Involvement, highlights how military investors use advisors as well as their overall financial attitudes.

Another important factor is the relationships many military investors enjoy. Some of the best opportunities for referrals may be available through these relationships. Financial advisors that are able to develop relationships with investors who have a military background may find that there is significant opportunity to assist with their long term wealth management.