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Retirement Readiness

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With all the recent attention on baby boomers and their retirement readiness, it’s no wonder that one of the biggest concerns for investment advisors and financial planners today is retirement planning. If the goal is to ensure a livable income for retirees, then a shrinking Social Security net, soaring healthcare costs, and the virtual disappearance of fixed pensions are not making any soon-to-be retirees breathe easier.

In our most recent survey, AdvisorBenchmarking investigates this challenge and sheds more light on how advisors can turn this market challenge into real business opportunities. As wealthy clients transition into retirement and begin to transfer wealth to their heirs, retaining boomer assets has become a key objective for most advisors. Right now, nearly half of advisors (43%) say that 20% to 40% of their clients are retirees and that number will only multiply in the coming years.


Be a Retirement Expert. But How?

Many industry pundits advise you to become a “retirement expert” so you can take advantage of the boomer retirement trend. And our data indicates that you’re taking that advice to heart: About half (51%) of advisors are developing tools and resources to assess clients’ retirement readiness and identify areas where they need additional support. About a fourth (26%) are seeking to build strong relationships with the children of their clients, and 24% are seeking to become retirement experts by taking educational seminars and courses. Some (21%) are positioning themselves as “retirement coaches” and 17% are partnering with other professionals who offer services to pre-retirees.

But what does being a “retirement expert” really mean? As Fed Chairman Ben Bernanke comments in a recent speech, education is very important to the American economy. A substantial body of research demonstrates that investments in education and training pay higher rates of return both to individuals and to society as a whole. The same is true for the RIA industry–training and education are some of the most important attributes of a good advisor. First and foremost, advisors have to educate themselves on retirement–and not only in the product area. According to our survey, advisors feel they are well-equipped on product related issues, but admit that they need a better understanding of all the non-investment implications of retirement, such as healthcare and living arrangements.


Enhance Your Retirement Knowledge

Retirement income, wealth preservation, required minimum distributions, health care–all are areas that retirees are desperate for guidance and expertise. Advisors who are prepared and knowledgeable about retirement issues will have a real competitive edge and be able to attract and retain clients for whom retirement is top of mind. Thankfully, there are many resources at your disposal to hone up your knowledge base.

1. Consider taking courses on wealth protection and retirement income management.

- The American College offers a CASL Retirement coaching program to teach advisors how to lead their clients from middle age through retirement and wealth management and transfer.

- The Society of Certified Retirement Financial Advisors offers courses focused on the management of retiree financial assets.

- The Institute of Business and Finance offers a 60-hour program which teaches the practitioner to be a retirement income specialist. The institute offers materials on estate accumulation, preservation, and distribution.

- The Retirement Income Industry Association offers a retirement income planning educational program called Delivering Retirement Income Solutions which is designed to provide an overview of the “key risks and issues retirees face and also help advisors deliver the correct investment and risk management solutions to their clients.” RIIA says the educational program will be the first in a series of programs that will result in an industry designation accrediting financial advisors as “Retirement Income Specialists.”

- The American Bankers Association is offering Certified Retirement Services Professional and Certified IRA Services Professional programs.

- The Accreditation Council for Accountancy and Taxation offers an Elder Care Specialist program which is designed to improve advisors’ knowledge of preparing their clients for retirement, the essentials of estate and trust planning, and financial planning for the elderly.

2. Explore courses on medical expenses and health care.

- The Center for Senior Studies offers education on topics focusing on the evolving and specialized needs of America’s citizens as they age.

3. Solidify your reputation with CPAs and attorneys as a local retirement plan expert. According to our study, 17% of advisors are partnering with other professionals who offer services to pre-retirees.

4. Showcase your expertise with designations.

While developing your retirement income planning expertise, take the time to put the letters after your name–and those on your staff. Let your prospects and clients know that you have received more professional training in this area than your competition. For example, The College for Financial Planning, which created the CFP mark, has offered the chartered retirement planning counselor (CRPC) designation since 1997 and now also offers a Chartered Retirement Plans Specialist (CRPS) designation.

Now more than ever, clients need your help to address their issues related to retirement. The dearth of retirement knowledge in the industry combined with the population’s insatiable hunger for this information and guidance means that opportunity is not just knocking on the door–it’s about to break it down. Those advisors who are prepared to help their clients will have a distinct market advantage and very satisfied clients.

(The designations and classes listed are subject to change at any time. This information should not be construed as a recommendation of any specific program or designation.)

Maya Ivanova is a research analyst with Rydex, an affiliate of Rydex Investments. She can be reached at [email protected]. The 2007 Rydex AdvisorBenchmarking survey opens on March 14, 2007. The first 100 advisors to take the 2007 survey after March 14 will receive a free copy of The New York Times bestseller, The Number. Visit to see how your firm stacks up to the rest of the industry by viewing dynamic charts that instantly show you industry comparisons versus your firm’s data.


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