Most retirement planning advisors don’t feel that product providers are doing a good job of helping them, says a new report.
Only 31% of 331 advisors surveyed by Brightwork Partners, Stamford, Conn., said providers are doing a good job of providing them with tools and products to assist them in retirement income planning.
Those are among a number of findings included in the 2009 Marketplace Update from the SPARK Institute, Simsbury, Conn., a trade association for 401(k) administrators. SPARK published the Brightwork data along with its own.
Of advisors surveyed, 70% agreed that now that business is shifting from asset accumulation to asset distribution, advisors themselves have to get smarter about retirement income planning. And 58% said advisors need to spend as much time with clients on lifestyle and living expense changes as they do on planning retirement income.
Only 25% said pre-retiree clients are in good shape to achieve their income replacement goals in retirement, according to the Update.
Conducted by phone in December 2008 and January 2009, the survey sampled views of advisors who provide retirement income planning services and products.
When advisors ranked the most effective vehicle to use, written financial plans placed first (by 72%), over annuities (65%) and asset allocation (55%).
As for product preference, advisor use and acceptance of an immediate or payout annuity jumped to 53% at year-end 2008, from 29% in 2006, Brightwork found.
But use of systematic withdrawal plans ranked first, at over 80% usage in both years.
SPARK figures showed that total retirement plan assets were $12.5 trillion in 2008, down 19% from 2007, which was a record year, according to the update. This total includes assets in defined contribution plans, defined benefit plans and individual retirement plans.
But over 90% of employee participants in workplace savings plans continued to make contributions, the report said.
In the 401(k) market, assets were down to $2.3 trillion due to poor investment returns, but the number of plans actually grew by more than 20,000 in 2008 (to 4.9 million). The number of participants grew, too, by 7.6% (to 72.9 million), the report said.