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Military veterans seeking the guidance of a financial advisor have a background and career that is different from civilian clients. But veterans have similar goals and motivations for seeking your help. However, the differences in their career journey and lifestyle often lead to unique financial circumstances, compensation structures and other considerations that all advisors should be familiar with before working with any military or veteran clients. 
Understand what’s important to your client
Getting to know your client should always be the first step in any new relationship. Make your first encounter as casual and conversational as possible and ask not only about your new client’s tangible goals (i.e., putting away money for college tuition, purchasing a new home) but the deeper meaning and motivation behind those goals. You’ll learn not only why they’ve come to you for guidance, but you’ll gain a deeper understanding of what’s important to them as a person.
During service, they answered to a higher, collective purpose. Now that they are out of the military, they may be rediscovering old passions or exploring new career paths or hobbies that motivate them. Understanding the inspiration behind their financial goals will help you and your client identify the most appropriate and effective means to achieve them. Goals can change over time, particularly if your client is a veteran navigating a new career post-service. Check in often to ensure you’re still on the same page.
Understand the nature of their service
Once you’ve covered your client’s personal history and motivations for seeking your assistance, dive into some specific questions about their military career to help you gain a broader picture of their financial situation. The first and most important topic to cover is the nature and length of their service, as this determines what defined benefits and compensation they are receiving or will receive.
A military veteran can be an individual in their early 40s, looking to pursue a second career with a life-long pension available from their time serving. These circumstances are a bit different than the traditional concept of a civilian retiree. At minimum, when working with a new veteran client, ask how long they served and if it was active duty or reserve. Most clients will receive their retirement pay through the military’s legacy retirement system, which offers a defined monthly pension after 20 or more years of service. Time served and retired monthly base pay are factors that determine the veteran’s pension in retirement. While less likely to be a factor for your veteran clients in the near future, you should also be aware of the new blended retirement system (BRS), which new service members are automatically enrolled in and includes a matching contributions option.
Identify their healthcare needs
Understanding current and anticipating future healthcare needs is crucial to long-term financial planning for any client. When you’re working with a veteran, this conversation is even more crucial. Any and all service-related conditions were likely documented and confirmed by medical professionals at the time the veteran transitioned out of the military. Ask about this process and any documented conditions you might need to be aware of which qualify them for additional compensation, resources and benefits that civilian counterparts don’t have. Many healthcare plans for active-duty retirees are one-third the cost of civilian premiums. Veterans who qualify for VA disabilities may also be eligible for long-term care resources. Research the landscape and understand what options are available for veterans in different scenarios so you can provide your client and their family with informed and level-headed advice on these plans and how they fit into a broader financial strategy.
Identify means of protection and security
Similar to healthcare plans, when it comes to life insurance products, there are a lot of unique offerings available to veterans and their families. You’ll want to ask new veteran clients about any current policies that they’re holding to factor them into an overall, long-term plan. Are they already enrolled in the government’s Veterans Group Life Insurance (VGLI)? This is a guaranteed-issue, term-life group policy and might be an attractive option for clients with concerns over the underwriting process. However, there are many third-party options that might be more lucrative and still offer the benefit of being exclusive to military members.
Further, the market for whole-life policies or even annuities available to veterans is different from civilian offerings. If your client is looking for a life insurance and retirement income option that’s lower risk, don’t discount plans that are available exclusively to military families. These options enable your client to build value without risking termination fees or premiums. Regardless of your client’s circumstances and short- or long-term needs, be aware of all the offerings available and be prepared to discuss which ones you believe are best-suited to their lifestyle and current financial situation.
The opportunity to advise a military veteran on how to help them reach career, personal and lifestyle goals can be tremendously rewarding. While serving their country, these individuals had to be prepared to tackle any situation. They possess the flexibility to adjust to the unexpected. Keep this ideology in mind when you work with veterans to craft financial plans – every decision and recommendation should take their circumstances and goals into consideration and be flexible enough to shift with changes in their needs or the broader market. By offering flexible, level-headed expertise, you can work alongside a veteran and their family to reach their goals, whatever they may be.
Jerry Quinn is a Lieutenant Colonel, U.S. Army Reserve & chief operating officer of the American Armed Forces Mutual Aid Association (AAFMAA), our nation’s longest-standing military financial services not-for-profit organization.
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