Close Close

Retirement Planning > Retirement Investing

Retiring Boomers Press Advisors for More Guidance, Report Finds

Your article was successfully shared with the contacts you provided.

Advisors are struggling to meet the demand for retirement guidance and products from the increasing number of boomers preparing to retire, a report from independent consulting and research firms GDC Research and Practical Perspectives found.

Over 70% of advisors have seen more clients who need retirement income solutions in the last year. One of the challenges these advisors face is how to deliver sustainable income and manage risk. One-third are looking for products with more guarantees.

"There's greater validation for advisors to shift their focus to retirement income,” Dennis Gallant, president of GDC Research and co-author of the report, told AdvisorOne on Friday. "Advisors are seeing the percentage of retirees or near retirees in their client base increasing. Those who look at retirement income as a distinct discipline and can help their clients articulate greater needs in retirement are capturing more business."

Gallant noted that they expected to see more turnover from clients after the recession.

"They don't dislike their advisors," he said, "but they're not sure what they're looking for. Best practitioners talk about retirement differently; they envision what retirement is and drill down into all the potential risks. Clients will consolidate their assets with those advisors and will tell others about them."

Advisors are turning to a wide range of providers to help their clients generate income; the top firms named in the report are American Funds, Franklin Templeton, PIMCO, iShares, Metlife, Jackson National, Prudential and Lincoln Financial. The report noted that almost one-quarter of advisors place a disproportionate amount of assets in their "primary" firm.

Advisors indicated they are unsatisfied with the support they receive from mutual fund companies, annuity providers and broker-dealers, citing a need for "more sophisticated training and technology."

“There is little doubt that the support and sales processes to serve advisors are expanding," Howard Schneider, president of Practical Perspectives and the report co-author, said in a statement. "Our research into leading practices suggests that advisors are open to using the support that product manufacturers and servicing platforms offer.

Those firms that deliver what advisors really want and expect can create a distinct competitive advantage to stand out in a crowded market.

Despite their struggles, advisors are optimistic; two-thirds are confident their clients will be able to meet their goals.

Schneider noted that advisors weren't taking advantage of the significant opportunity the boomer market represents.

“The aging of the boomer generation is definitely shifting from hype to reality,” he said. “Yet only a limited number of advisors are positioning their practices to exclusively serve this market."

"The wave is here," Gallant told AdvisorOne. "Everyone talks about the coming boomer wave, but it's here. For advisors, the opportunity is to capture them, but from a consumer standpoint, all they hear is the same old, same old."

As for which solutions advisors are using, "there is growing use of certain vehicles such as ETFs and variable annuities," Schneider said. "Yet we continue to find significant variation in the approaches, products and providers that advisors use to deliver retirement income to clients.”

"Advisors aren't throwing out their entire process, but they're looking for further insight," Gallant said. "More advisors want guarantees. They want to mitigate market risk and volatility. The challenge is how to meet the pressure to optimize and integrate those products. "

"There isn't one product solution, it's a solution of products," Gallant concludes. "It's not a product need; advisors use a variety of products to create income."


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.