Doing well in the retirement market requires manufacturers and advisors to make retirement planning both palatable and easy for middle-market consumers, experts agreed at a life insurance conference here.

Consumer inertia is the greatest challenge to marketing retirement products, noted Steve Deschenes, executive vice president of Fidelity Investments Inc., Boston.

Only 22% of retirees have an income plan–and half of those didn’t even develop their plan until they actually retired, he said, speaking at the annual executive conference for the life insurance industry, held Dec. 14-15 by the National Underwriter and the Conference Group Ltd.

“We have to engage people in a way that makes retirement planning more attractive and interesting,” he said.

To engage clients in the complex decisions that have to be made about retirement, financial service companies and producers must make the planning task as simple and appealing as possible, Deschenes said.

He predicted continued product innovation from life insurers would help simplify retirement decisions, including new lifecycle funds, fixed immediate annuities with extra features and longevity insurance, which would pay off when the policy owner hits a given age.

Wachovia Corp., Charlotte, N.C., is trying to fulfill the retirement needs of most customers by offering them education programs through their workplace or over the phone, said Robert Reid II, president of Wachovia’s retirement and investment products group.

Many of those customers have less than $100,000 in annual income and only a small amount of investable assets, he observed.

“The reality is, they’re going to have to work after they retire,” Reid said. Otherwise, “they aren’t going to be able to save enough to generate meaningful income.”

Wachovia classifies customers by their wealth and directs them to advisory services suited to their financial situation, he explained.

Emerging affluent customers with over $100,000 in annual income and $100,000 to $250,000 in investable assets are directed to Wachovia’s financial centers, where specialists assist them in getting into retirement shape, he said.

Affluent investors, with $250,000+ to $2 million in assets, are assigned to certified financial advisors in the bank’s Wachovia Securities division. Richer clients are handled by the bank’s wealth management division, Reid explained.

Face-to-face contact is vital if an advisor wishes to establish a long-term relationship with a client, he said. An advisor who makes a connection early in the customer’s working life is in a strong position to capture that individual’s retirement dollars later, he added.

“Our research shows that it takes 7 years on average to develop a trusting relationship with an advisor,” Reid said.

Wachovia found over 60% of people who change jobs and more than 66% of retirees invest their rollover funds with a financial firm where they have an existing relationship, he said.

The middle market, constituting those with more than $100,000 assets per household, makes up about a third of the U.S. adult population and controls around 39% of U.S. retail assets, said another expert, Mark R. Thresher, president and chief operating officer of Nationwide Financial Services Inc., Columbus, Ohio.

Worksite distribution will be the key to reaching that market, Thresher said. Other economical methods of maintaining contact with these customers is through on-line advice and financial tools; providing prepackaged product mixes; selling directly, such as through the mail and Internet, rather than through investment professionals; and by offering simple products with clear pricing, he said.