Providing retirement income support certainly involves a great degree of technical analysis. Yet there are also the more personal issues that must be considered when developing any retirement plan. Among the many challenges for an advisor serving retirees is going beyond the basic retirement math to uncover the true needs of each client. To create an effective plan, advisors need to uncover those issues that clients may be unable to readily articulate, but which loom beneath the surface.

Getting Personal

Our work with leading advisors serving retirement clients suggests that these practitioners dedicate an exceptional amount of time and effort to discovery, or identifying both expressed and unexpressed client needs. The process these advisors follow is worth considering as more practitioners shift their focus to retirement support.

The transition to retirement is a challenging journey for many clients, with significant personal and emotional issues intertwined with financial uncertainty. Prospective retirees often have few role models for this transition and turn to their financial advisor for support. It is through the discovery process that advisors identify the true needs, fears and desires of retirement clients. Too often, advisors find that prospective retirees have just a cursory understanding of the issues and challenges found in retirement. Many clients are able to voice only basic questions or expressed concerns, and are unable to articulate their underlying expectations and concerns.

The discovery process differentiates leading advisors, who use their experience and expertise to gain a full, integrated assessment of the client’s singular situation. Most retirement-focused advisors are highly skilled at eliciting information from prospective retirees on both financial and personal issues. And it is through the discovery process that the bond of trust begins to form within the client/advisor relationship.

The discovery process serves as the foundation for creating action steps and a plan. As one advisor stated, “Dialogue and conversation around what retirement looks like for the client are crucial.” Most advisors use the discovery process to identify the clients’ goals for the future.

These goals may include travel, funding education for grandchildren, starting a business or leaving a charitable legacy. Advisors also explore general attitudes and past behaviors, especially as they relate to money, spending and risk. In most cases, advisors follow a formalized process for discovery involving the following elements:

o Qualification – Advisors often pre-qualify their prospective retirement clients on multiple factors. Advisors want to avoid engaging clients with unrealistic expectations, excessive spending habits, or who are chasing top performance. Pre-qualifications are often done on the phone or in a 30-minute interview.

-Face to Face Consultation – Face to face consultation is essential and typically involves at least two meetings. The initial meeting is focused on getting to know the prospective client and establishing rapport. The discussion is focused more on understanding the client’s goals and assisting them in envisioning retirement, rather than on solving a specific financial issue. The advisor conveys their philosophy, process and approach to serving retirement clients. They may also provide the prospect with a questionnaire to fill out prior to the next meeting. The second meeting is more focused on data collection and agreeing on the goals and priorities that will underscore the retirement plan.

– Spouse – In virtually all situations, advisors include the client’s spouse in the discovery process. Many advisors have learned that husbands and wives often share differing views on money, retirement and what they expect for the future. Reconciling these differences early on can avoid significant detours and additional workload. As one advisor stated, “Not including both of them in the discovery process only causes more effort and more headaches for me down the road.”

– Data Collection Tools – Best-practice retirement advisors have developed various tools covering retirement issues. Common tools include worksheets, surveys and questionnaires. Among the subjects the worksheets may cover are personal and family history, wealth, insurance, sources of income, and debts, liabilities or other obligations. Advisors also drill into areas such as special needs or concerns, health, impending life events, employment, and future goals, objectives, and expectations. Most advisors use a tool compiled that they have refined over time from their experiences in working with retirement clients. For example, one advisor has a lengthy discovery questionnaire that includes over 150 questions designed to create a detailed view of the client situation. No matter the length of the process or depth of the tool, advisors need to be flexible to deal with the varying ability of clients to openly express their needs and share information.

– Comprehensive and Consolidated – Typically, prospective clients are more than willing to provide a comprehensive perspective on their financial situation. Few advisors seem concerned about ultimately developing a deeper understanding of the client. As one advisor states “Clients understand the importance of providing the full picture of their finances and personal situation as they approach retirement. We make it clear that we need as comprehensive a view as possible to do the best job for them in setting up the plan for retirement income. People seem more than willing to share information and, ultimately, aggregate assets with us.”

– Determining Expenses – Retirement expenses are one aspect of the discovery process that advisors perceive as highly important but less predictable. Some advisors ask clients to build a detailed budget of current spending and what they expect to spend in retirement. However, most advisors do not drill into the detail of spending patterns but instead take a more top-down, high-level view. Basically, this approach provides a starting point for discussions on retirement spending since spending patterns do not generally emerge with any clarity until the client has lived for two to three years in retirement.

In Closing

Best-practice retirement advisors are skilled at exploring issues that clients are unwilling or unable to articulate. A major challenge, of course, is that not all advisors who wish to serve the retirement market are adept at discovery. For these advisors to succeed, it will be critical for them to enhance their relationship-building skills, finding ways to connect so that they may uncover the true retirement needs of clients.

If you are an advisor who would like to share experiences or practices in delivering retirement income and longevity support, we welcome your perspectives. Contact us at gallant@gdcresearch.com or howard.schneider@practicalperspectives.com.

Dennis Gallant is president of GDC Research. Earlier, he was a director of Cerulli Associates and a vice president for Funds Distributor in Boston.


Howard Schneider is the founder of consultancy Practical Perspectives near Boston, worked previously for Scudder Investments and has served as chairman of the Mutual Funds Education Alliance.