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Retirement Planning > Retirement Investing

Where’s your retirement plan?

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Preparing for retirement is one of the most common phrases agents and advisors across the country use in business. This notion is weighing on thousands of boomers at or nearing retirement, and continually seeping into the minds of younger generations given how their parents and grandparents have been affected by stock market volatility and the recent “Great Recession.” Ironically, many of these very producers who have dedicated their careers to helping others retire safely and comfortably have neglected to prepare for their own retirement futures.

The majority of producers today are in their 50s, and many are independent small-business owners. Yet, according to LIMRA, 47 percent of these producers plan to never retire.1 The statistics aren’t any more encouraging for RIAs or advisors with a broker-dealer relationship. While it would be logical to assume that smaller advisory firms and solo practices lack the time to invest in succession planning, statistics reveal this trend persists across RIA firms of all sizes and levels of sophistication. In fact, a recent report by Pershing Advisor Solutions shows that 70 percent of advisory firms with $5 million or more in revenues either lack a succession plan completely, or at best have an inadequate one.2

“Few agents and advisors today have a succession plan and are adequately prepared for retirement because most don’t know if their businesses are even worth selling,” said James Mitchel, the vice president of developmental research at LIMRA. “Research we’ve conducted indicates that only 11 percent of advisors have had their practice professionally valued. Without an idea of how much a sale will add to other assets, many simply continue working for years to come.”

Focus on reality

Rather than avoiding preparation for enjoying their golden years, producers need to focus on the reality at hand. First, they must recognize the theory that “my business is my retirement” simply doesn’t cut it. It is unlikely they will receive a lump sum upon the sale of their firm. Even if they do, it’s unlikely it will be enough to live on without supplemental income. For many, their practice will not be set up so it is sustainable or as valuable without the agent or advisor at the helm.

Next, producers should look at how much they have set aside for retirement in IRAs and other savings vehicles. Are they earning money through trail commissions or a carrier-provided deferred compensation program? By combining this quantitative approach with recognition of the desired retirement lifestyle, producers can pinpoint any resulting gap and determine how to fill it in the number of working years left. Sound familiar? Of course. It’s very similar to the consulting you likely do every day for your clients except now it is for you.

Today, a select few industry organizations are contributing solutions to this unique challenge. By partnering with one of these groups who understand both the personal and professional needs of the field, producers can focus on building their business now while enjoying the retirement they deserve later.

“Providing a deferred compensation plan in addition to traditional compensation is something we anticipate seeing more of as IMOs continue to lead the charge in improving the financial lives of agents as well as consumers,” said Mike Tripses, president of Creative Marketing.

1) Mitchel, James O. Advisor Retirement An Oxymoron? LIMRA Research, 2008.
2) Gleeson, Jerry. The Three Deadly Mistakes of Succession Planning. Jan 20, 2012. Available online at http: //
For agent use only. Not for use with the general public.

“Research we’ve conducted indicates that only 11 percent of advisors have had their practice professionally valued.

Merrit Strunk is Chief Marketing Officer for Creative Marketing. He has more than two decades of strategic marketing, advertising and business consulting expertise and can be reached at [email protected].


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