Ask your clients if they’re financially prepared for retirement and you’ll receive a variety of answers. Too often, however, many of your clients earnestly believe they are prepared for retirement, when in fact they are not doing enough. This is especially true of members of the Baby Boom generation, the lion’s share of which are rapidly approaching retirement.
Since 2001, Mainstay’s Across Generations research has quantified this disconnect between clients’ beliefs about retirement and the reality of their financial picture. For example, pre-retirees responding in the 2005 survey (i.e., those aged 55-65) predicted that they would have savings of roughly $1 million and a net worth of $1.53 million by the time they retired. However, those same respondents reported average current savings and net worth of $660,800 and $904,000, respectively.
Your job is to help bridge the gap between perception and reality. One of the most effective bridge building techniques is to consolidate your clients’ retirement accounts. By consolidating those assets, advisors can holistically assess a client’s retirement picture–and prepare their clients for a comfortable retirement while building their own book of business. But to do so, you need all the information. Asset consolidation can be completed in four simple steps.
Gather the Information
First, collect the information you’ll need to coordinate the transfer of portable retirement accounts (IRAs, IRA rollovers) to your firm. List all the details of the client’s (and spouse’s) qualified and non-qualified plans. While you won’t “control” some of these accounts, you will want to take them into consideration when making a recommendation on the retirement assets residing with you.
Use one of the many consolidation tools available in the marketplace, such as MainStay Investments’ Retirement Savings Consolidator, to simplify the process of finding assets and moving them. Work with your clients to document the locations of every retirement account, the current account value and investment position, as well as the details of other qualified and nonqualified plans that may influence the investment of these assets.
Discover and Allocate