When Your Clients Can't Go On Vacation



One painful aspect of the coronavirus pandemic on American citizens is that it eliminated or vastly changed the summer plans of making people.

After first halting any academic travel for students considering study abroad, the coronavirus severely injured the travel industry as European vacations were eliminated or severely curtailed. Because of the contagious nature of the virus, airline travel has been dramatically impacted, and because the virus attacked most other countries in the world, there seems less interest in going elsewhere just to not be able to walk around freely.

Especially hard hit in this area would be retired investors, who are likely older than others and therefore more susceptible to the deadly nature of the coronavirus. It would make sense if the grandparents and older citizens are just choosing to stay home this summer rather than take that European trip or that vacation cruise.

Which brings up an important topic for advisors: what are your clients going to do with the money they have set aside for their leisure activities, money that they may not be spending this year?

According to Spectrem’s study Portfolio Trends, Expenditures and Perceptions of Providers*, 58 percent of retired investors with a net worth of at least $100,000 not including the value of their primary residence spent at least $5,000 on vacations in the previous 12 months. Thirty percent spent at least $10,000. Slightly lower percentages are shown for investors who are still working.

That is money that is not invested anywhere, other than perhaps a simple savings account. Considering that vacations are a part of the routine (and joy) of retirement, it is likely those investors have that money stashed away for another vacation in the coming months, a vacation they are likely not to be taking.

Would it be prudent for you, as an advisor, to discuss with your clients who are frequent travelers to find out just what they are doing with the money they set aside for travel, money they are likely not spending?

Asking clients about personal expenditures might be considered invasive unless the advisor can point to the value of knowing how investors are spending their money. The money investors are not spending on vacations now can invested and turned into greater assets for future travel with the virus and the emotional response to the idea of catching a contagious disease has passed.



*This research is part of your Spectrem subscription.




©Spectrem 2020

Keywords: expenditures, vacation, investors, advisors, Spectrem, portfolios