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At Pershing Insite Conference, No Increase in Retirement Confidence From Clients

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If anyone still doubts the interest in retirement and retirement planning issues, they need only have attended the “Find a New Niche: Become a Retirement Specialist” breakout session at the Pershing Insite conference in Hollywood, Florida, on Thursday June, 10. The standing-room-only crowd was there to hear specific strategies for building a successful practice centered on retirement planning. Moderated by Brian Lamar, Pershing vice president, the session featured Marcia Mantell, owner and principal of Mantell Retirement Consulting Inc. and Julie Jason, president of Jackson, Grant Investment Advisers Inc. According to Lamar, both women have built successful retirement practices from the ground up and would offer specific strategies for the gathered advisors.

Key demographic, economic and industry trends were covered, as well as and how they are shaping the retirement landscape. The growing size of the IRA market, the changing needs of Baby Boomers and the expanding small business owner segment were also covered. Lastly, required minimum distributions, Roth conversions, and net unrealized appreciation were explained.

When asked by Mantell if any of the gathered advisors currently had a “retirement-centric” practice, only a few hands were raised, illustrating just how far the industry has yet to go in addressing client distribution needs.

Referencing a Time magazine cover story from 1962, she noted retirement planning is not a new concept, but one in which an increasing urgency is being felt.

“Over the next 40 years since the cover story, there were a total of three other cover stories on retirement planning in major consumer periodicals,” Mantell said. “But over the past 10 years it’s increased to a point where there is almost one a week. ‘Who owns your retirement?’ is the question asked by most.”

The answer is the client, and preparation for this ownership is not good. Jason quoted a Hewitt Associates study that found clients must have 15.7 times their highest annual salary at the time of retirement in order to be successful. Even more alarming, Social Security will account for 4.7% of that amount.

“When researching retirement confidence indicators, we found that 2009 numbers, which were extremely low, have not moved in 2010 so far,” she said. “As we come out of the recession, retirement confidence is not increasing.”

All aspects of the consumers financial picture are concerning, Mantell added. Investments are off, inflation will increasingly be a threat and housing values have experienced the biggest drop since the recession. Household debt was the worse indicator of retirement health, with the age 55-to-64 demographic averaging $110,000 in debt, and those 65 and over (the traditional retirement age) averaging $70,000 in debt.

“Consumers are learning somewhat of a lesson,” she said. “They are more frugal, but they are also more fragile. They don’t know where to turn, and this represents opportunity for the advisor.”

Read a story about three top advisors’ crisis strategies delivered at the Pershing Conference from the archives


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