Consolidate and Refer

So, what’s the downfall? Retirement income planning is more complex than asset accumulation, requires more time and research, and provides less compensation, due to conservative portfolios and a shift to products that generate lower commissions. “The thing that an advisor should consider is that this is a longer process with a client, but I believe the benefits far outweigh that with consolidation of assets, and referrals, and client satisfaction,” notes Liebrock. In fact, as indicated by the report, advisors may not have much of a choice when it comes to keeping up with the changing environment–they will have to do it to stay competitive. “People that are five or 10 years from retirement are going to want to start understanding how they will be able to pay themselves in retirement,” explains Liebrock. “If they are talking to an advisor today who doesn’t want to talk about that, they’re going to go find someone who will talk about it.” According to the study, clients are ready to talk about retirement-related issues, yet advisors aren’t providing enough information. For example, 28% of respondents are looking for advice on long-term health care, while only 8% are actually receiving that advice. “These conversations require an advisor to acquire that knowledge or outsource that knowledge and someway bring that expertise into their office. It’s about educating yourself and communicating that to your client,” states Liebrock.

The Fidelity report also presents “Five Key Strategies” for helping advisors successfully address the changing retirement market:

1. Become proficient in all things retirement, creating a retirement specialist brand;
2. Use health care knowledge as a differentiator;
3. Combine income planning with effective client management strategies;
4. Evolve to a more efficient, profitable business model;
5. Refine client acquisitions strategies for retirement income planning.

According to Liebrock, the way an advisor positions himself in the marketplace to potential customers is important, particularly branding yourself as a retirement specialist. “Consumers are attracted by comfort level, with regards to a brand. If it’s not really carved out, as to what you’re offering to a consumer, you may be missing out on opportunities,” he says. “I think that expanding your practice beyond the traditional investments and looking at issues that retirees focus on, such as retirement healthcare issues, is going to be important as well.”