Retirement Income Symposium: Reynolds on Policy; Birke on Communication

Putnam’s Bob Reynolds makes the case for new retirement policy, and Commonwealth’s Kol Birke and David Juliano provide practical guidance on client communications

“Seven thousand baby boomers are turning 65 every day, and will be doing so every day for the next 17 years.” Putnam Investments President and CEO Bob Reynolds used that sentence to begin his keynote presentation at the 4th annual Retirement Income Symposium Monday in Boston.

But beyond setting out the scope of the retirement puzzle, he then went on to provide some practical solutions to solving the puzzle while laying out the “multitrillion dollar opportunity” that those boomers present for advisors.

bob reynolds of putnamReynolds (left) said “we’re close to cracking the code” on saving for retirement, which includes providing access to retirement plans, auto-enrollment in those plans and the use of better asset allocation options within the plans. Putnam’s research, he says, has found that a 10% or more deferral rate will provide consumers with what they need in retirement, once Social Security is factored in.

“What’s the variable between those who are best and least prepared” for retirement, he asked? “It’s not income,” he answered, citing research that shows that participation rates in workplace retirement plans with auto enrollment are as high as participation rates for workers with higher incomes.

Reynolds reiterated his call for a national insurance charter and creation of a federal Lifetime Income Security Agency—LISA—that would vet lifetime income products, including annuities. Such an agency, he predicted, “would have the same impact on retirement planning that creation of the FDIC had on banks during the Depression.”

The second session in the day-and-a-half RIS, a production of Summit Business Media’s Investment Advisory Group (which includes AdvisorOne) featured two client behavioral specialists from Commonwealth Financial Network—Kol Birke and David Juliano. Their talk focused on how advisors can efficiently coach clients through key retirement decisions, and presented a four-step process for helping clients discuss and then deal with some of the more unpleasant but necessary options that might arise in retirement planning.

To help clients address fears in areas such as market volatility that are outside their control, Birke suggested picturing the most helpful approach in this way:

When a client is sitting at the edge of a cliff and all before them looks bleak, the advisor should first sit next to them to appreciate what they see before he or she can point them toward the good parts of their lives. The creation of such "positive emotions," he said, helps expand people's view of the world, allowing them to see all their options and then take the most rewarding action that meets their needs.

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