There’s been a lot of talk about retirement income distribution planning over the last couple of years. Now for the action — early stage industry trends that promise to do no less than reshape the role of the leading-edge financial advisor.

As Francois Gadenne, executive director of the Retirement Income Industry Association, said at the organization’s annual meeting in Boston recently: “It’s not going to be same-old, same-old. Change agents are never pretty or polite. They change things.”

Already, advisors at the forefront of longevity support and guidance are redefining just what it means to be an advisor, according to a new research study compiled by two Massachusetts-based consulting firms, GDC Research and Practical Perspectives.

“This is still a marketplace that’s not well defined in terms of solutions. It’s very diverse in terms of how advisors are addressing these needs,” notes Dennis Gallant, GDC’s president. “There’s no role model here. They’re building it.”

Among the notable developments identified in the 108-page report:o A broadening scope of client support, with core advisory services extending to include challenges such as health care, elder care and family issues.o A consideration of both the financial and emotional aspects of retirement — or life planning.o A growing emphasis on longevity planning.o The need among advisors for deeper relationship management skills that combine both technical and emotional support for the demands of retirement living.o A planning-centric business model oriented to independent, fee-based team practices.

The report, “Advisor Best Practices: Retirement Income & Transition Support,” suggests that fewer than 5,000 of an estimated 300,000-plus registered financial representatives in the U.S. are currently “heavily” focused on the delivery of retirement support.

But that will no doubt change.

As Gallant observed: “This is something you’re going to see broker-dealers and asset management firms begin to grapple with: how to support the process. Not a large portion of advisors is demanding it just yet. It’s emerging, it’s growing and it always starts with large practitioners. We’re only in the first inning here, maybe the second.”

The shift in approach occurs at a time that Americans are famously unprepared for retirement. A Bank of America survey undertaken early in the year revealed that 30 percent of Americans find that starting retirement planning is tougher than starting an exercise regimen or a diet. While 80 percent were familiar with 401(k) plans, one-quarter chose not to use them. Likewise, 68 percent were familiar with IRAs, but only 40 percent had one.

Meanwhile, Ernst & Young’s Retirement Income Practice reports that three out of five new middle-class retirees will outlive their financial assets if they attempt to maintain their pre-retirement standard of living. Middle-income Americans entering retirement now will have to reduce their standard of living by an average of 24 percent to minimize going broke. For Americans seven to 10 years from retirement, that number is 37 percent.

To be fully effective, Practical Perspectives head Howard Schneider said advisors are going to need to become a “master of the client relationship,” adept at helping clients address both financial and personal challenges.

“The question of ‘What am I going to do with my time?’ is related to ‘Am I financially prepared to give up my full-time employment?’ Even if they don’t see themselves as a life planner, advisors have to help clients with these personal issues,” says Schneider. “We’re hearing from advisors that clients are sitting there with stunned looks on their faces asking, ‘What is it I should be doing?’ And that question comes before: Do you have the right health care protection, the right insurance protection? Are you taking care of elder parents?”

Moreover, he adds: “Transitioning to longevity is a unique event, when you think about it. It’s not something people have role models for. There’s not a patch individuals can look back at and say: ‘I’ve done that three times in my life.’ It’s not like buying a house or buying a mutual fund. There’s no pattern to look at. You can talk to friends or peers, but we’re each so individualistic you have to approach this in a customized way.”

Industry observers say that advisory teams and external networks — offering specialized advice on everything from career counseling to health care selection — will become a hallmark of the next-generation advisor.

“There is so much more knowledge they are going to have to learn. It’s going to be virtually impossible for one individual to do that. The advisor of the future is a team, a three-headed advisor,” according to Moshe A. Milevsky, executive director of The IFID Centre and associate professor of finance at the Schulich School of Business at York University in Toronto. “One person working out of his or her garage that’s clearing through Fidelity and trying to make a run of it — well, it’s going to be very difficult to survive that way.”

Milevsky said college-level education is already beginning to address the changing marketplace with training on the largest financial planning software systems, investor psychology and business development. RIIA at its annual meeting in September unveiled a template, still under development, for a new designation: the Retirement Management Analyst.

“There are all kinds of designations out there, but the bottom line is reps feel they need more credentials. They need more education. There are 180 designations in the financial world. Obviously, that’s overkill,” said Gadenne. “Is there one that can fill the gap?”

Master classes built around the proposed designation will likely be introduced late next year and distributed through universities and other channels. Fifty percent of the content would be unique and valuable to someone with a CFP or Series 6 license.

Milevsky, notably, foresees a time when there won’t be dozens of designations — just one.

“I almost think that becoming a financial planner will be like medical school at some point with training, residencies, internships, continuing education requirements and board certification. You can do a lot of harm if you don’t know what you’re doing,” he said. “You don’t need an explosion of credentials, you need an implosion. The maturity of the industry will show when only three or four credentials are left. How many credentials do you know for a medical doctor? I just know one: M.D. When that happens, you’ve got your advisor of the future.”

Trends In PlayThe resounding march of baby boomers into retirement and companion trends have been well documented. Elvin Turner, managing director of Turner Consulting in Bloomfield, Conn., is watching several other emerging trends that he believes will influence the retirement income picture in years to come.

First, he says, he’s been shocked at the number of advisors he’s talked to who say even very affluent clients are “looking for money” as they try to stretch budgets. Next, Turner, an expert in emerging retirement income opportunities, is forecasting something he calls “Defined Benefit Regret.”

Most employees don’t realize it, but as a result of job-hopping over the span of a career, they will receive just a fraction of their expected defined benefit. “They have no clue,” says Turner. On top of that, as corporations freeze their defined benefit plan contributions, savings will dry up. “These stories come out in waves — the credit crunch, the mortgage crisis,” he adds. “This will be another wave and the advisory community is going to have to deal with this in terms of income not being there.”

Finally, even with health care predicted to cost well over $200,000 per couple in retirement, Turner says many advisors are failing to meet the challenge head-on. “I see the reaction from the advisor community: They don’t want to deal with it. They don’t understand it. And they say, ‘Please, let’s not go there.’ We have to go there,” he notes.

Against this backdrop, the need for clear and informed guidance from the advisory community is fierce.

“Life planning skills are going to be needed like never before. If advisors manage money in a vacuum they are in trouble, particularly as folks hit the retirement stage of life,” according to Turner. “Given all this, the advisor has to have a broader background than they typically do today. We need to start with education and build an awareness of a wider range of topics than advisors are aware of today. Once you have that awareness, you can put strategies in place to address and manage these areas.”

David Macchia, president and CEO of Canton, Mass.-based Wealth2K and one of the industry’s top strategic marketing consultants, says that successful advisors will also have to utilize web-based communications tools and strategies that empower them to manage a technology-driven retirement-focused ecosystem.

“You may work hard to construct a solid retirement investing strategy that overnight can be wrecked by an unexpected health issue or an accident. You need to build out the ecosystem so that an advisor who is not expert in long-term-care insurance, for example, can engage clients on the topic and see it through. It’s a combination of technological and human assistance that becomes part of the advisory engagement,” notes Macchia. “Excellence in this area is one of the unconditional deliverables to achieve success.”

The Road AheadOne need look no farther than the Gallant/Schneider research study to get a glimpse of the path that forward-thinking advisors — or the “Ph.D class of retirement income,” as Schneider calls study participants — are exploring. [A majority of advisors interviewed had annual production of $1 million or more and serve upscale clients with a median account size of $500,000.]

With clients coming to advisors with expectations that exceed traditional investment management, there’s beginning to be a shift in focus. As one advisor put it: “Distribution planning is a process …not a product solution. It is not just starting a systematic withdrawal plan but instead making sure very specific goals are met in very specific time frames. The focus needs to shift from achieving return to achieving goals.”

Services not only include those typically associated with financial providers but emerging services that help to define a retirement lifestyle. One advisor highlighted in the study has created a de facto family office — extending his reach to include elder care, health care, travel, household finances, family dynamics, career planning and other personal situations that aging baby boomers will want help with. Interestingly, the study suggests that mid-sized team practices — those with two to 10 financial professionals on staff — are taking the lead in forming networks to deliver extended lifestyle services to their clients.

The study also identifies something it calls “advisor positioning” and “emerging services” — among them: Retirement Coach, providing support on the financial and personal front as clients transition into retirement; Human Capital Planner, delivering financial and career-related advice; and a Personal Consultant who is at the center of all key financial and lifestyle issues impacting a client’s well being.

“It seems like each week there’s a new study and a new headline: ‘Left-handed golfing boomers not prepared for retirement’ or ‘Redheaded 6-foot-2 Alaskans not ready for retirement.’ We all know boomers aren’t ready for retirement. We wanted to cover the gap that asks: What are advisors doing? What’s surprising is how each of these advisors on their own found a path to deliver retirement support in their own way,” says Schneider.

The other thing that surprised Schneider is that he expected advisors to report that retirement income support was much more difficult to provide, that it taxed their resources and was economically less profitable than accumulating assets. Not so.

“We didn’t get consistent agreement on that. What some advisors told us is that the issues aren’t more difficult, just different,” Schneider said. “Others said that while they spend somewhat more time initially with retired clients, once they get clients comfortable living in retirement, there really isn’t much of a time drain.”

What’s next? This big question: How scalable are these emerging business models as advisors move down market to serve the less affluent?

“The industry needs to figure out how you take those attributes and create a roadmap for the next generation of advisor,” says Gallant. “Elements of the dialogue process, how they look at building income streams — all those things have to come down market in some way. This is an opportunity for the industry to ask: What do we need to do to make the next generation successful?”

Leadership. Innovation. Excellence in communications. All important — and all factors in selecting the winners at the Retirement Income Industry Association’s second annual awards ceremony.

“What’s important is to create confidence around all of these strategies and solutions and that’s largely communications-based,” noted RIIA’s David Macchia, a strategic marketing consultant. “It starts with education. It’s making people feel comfortable. It’s about being compelling. And all of that creates confidence. A huge component of our future success is how we communicate our retirement income solutions. It’s vital.”

And the winners were:

Moshe A. Milevsky, executive director of The IFID Centre and an associate professor at York University in Toronto, is the distinguished winner of the Lifetime Academic Achievement Award.

Milevsky, the author of five books, has written over 50 peer-reviewed research papers on pensions, insurance, derivative pricing and retirement income planning. He has also served as a columnist at Research magazine.

Research magazine editor Gil Weinreich, in presenting the award, called Milevsky “the Flaubert of finance,” who writes about difficult topics with flair and memorable prose. As for Milevsky’s most recent book, “Are You a Stock or a Bond?,” Weinreich labeled it “an instant classic.”

“He’s a giant in the field of academic research,” he added. “His contribution to the financial services industry and personal finance is simply immeasurable.”

ING took the Retirement Income Best Advertising Award for its popular “Your Number” promotion. The firm also won the Retail Retirement Income Communications Award for best new media for its LifePayPlus microsite, which explains a withdrawal benefit available with an ING variable annuity. It can be viewed at www.inglifepayplus.com.

Fidelity Institutional Wealth Services won the Retail Retirement Income Communications Award for best printed materials for its Fidelity Retirement Income Planning Progam. The campaign poses the question: Your clients are about to retire. Are you ready to help them?

Lincoln Financial Group was awarded the plan-participant-focused Defined Contribution Communication Award for its “Where do you want to go?” retirement plan distribution options guide.

Oppenheimer Funds won the advisor-focused Defined Contribution Communications Award for its retirement income planning entry which outlines various withdrawal strategies.

Freelance writer Ellen Uzelac is based in Chestertown, Md.; the former West Coast bureau chief and national correspondent for The Baltimore Sun, can be reached at ellenuzelac@msn.com.