Four in 10 financial advisors say having retirement income discussions with clients is very or somewhat challenging, according to a speaker at the Insured Retirement Institute’s IRI Marketing Forum, held in New York City on Thursday.
Howard Schneider, president of Practical Perspectives, delivered that message as moderator of an afternoon workshop, “Strategies for Advisor Engagement. Participating on the panel were Rodney Allain, a senior vice president and national Sales director of Prudential Financial; James Brown, executive vice president of Advisor Group; and Craig Lombardi, managing director and head of sub-advisory and defined contribution sales for AllianceBernstein.
Schneider said that most advisors his company has surveyed since 2008 have a “significant” and “growing” number of baby boomer clients who require retirement income planning. The percentage of clients in this planning phase, he says, generally varies between 10 and 80 percent of the advisor’s customer base.
“The boomer market is not yet a Tsunami, but advisors definitely are seeing a steady growth in terms of the number of retirement income clients they serve,” he said. “Most advisors tell us the retirement income market is ‘very important’ to their practices.
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But Schneider observed that advisors are finding that delivering retirement income planning solutions to their clients is becoming more challenging. Among the reasons he cited are the uncertain market outlook; and the difficultly of crafting a customized income distribution plan based on the client’s retirement objectives.
The difficulty often stems, too, from having to communicate “bad news” that clients don’t want to hear. Prime example: Indicating that clients will have to plan for a smaller than expected monthly income because they didn’t save enough while working or because their investments have not performed as well as expected.
To help advisors better prepare planning engagements with retiring boomers, Brown said that Advisor Group regularly hosts webinars and in-person training sessions. The instruction is supplemented by educational resources provided by company’s manufacturer partners.
Lombardi observed that such education could prove critical to retaining longstanding clients who are transitioning from wealth accumulation to income distribution. He noted that advisors on “countless occasions” divulged to him that they lost a profitable client because they were unable to provide retirement income expertise.