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November 12, 2015 at 09:59 AM
While only a limited number of advisors position their practices to exclusively focus on individual retirement clients, these investors form the core of “virtually all advisor practices,” according to a new study by Practical Perspectives.
The study finds that 73% of advisors indicate that retirement clients represent more than half of the total clients they work with. This includes the 40% of advisors who say at least three-quarters of their clients are retirement investors. Nine percent of advisors count retirement clients as a quarter or less of their client base.
Practical Perspectives considers “retirement clients” as clients already retired, those nearing or in process of transitioning to retirement, and others who are still accumulating assets in anticipation of retiring at some later time.
The study is based on input from more than 850 financial advisors, including full-service brokers, independent brokers, financial planners and registered Iinvestment advisors, gathered through an online survey conducted in October.
RIAs are more likely than other advisors to identify retirement clients as a significant share of their overall relationships. According to the study, roughly half of RIAs have more than 75% of their clients as retirement-oriented investors.
Meanwhile, wirehouse advisors are less likely to be heavily oriented to retirement investors, although these clients still represent a hefty portion of their clientele. According to the study, at least half of all clients served by roughly 2 in 3 advisors in the wirehouse channel are retirement clients.
“While much of the industry emphasis may be on flashier topics such as robo-advice, social media, and serving younger generations, working with individual retirement is likely to remain the focus of most advisors for years to come,” the report – titled “Advisors Working with Retirement-Oriented Clients – Insights and Opportunities 2015” – states.
To this point, the study finds that more than 90% of advisors expect the number of retirement clients they serve will continue to rise during the next year.
Howard Schneider, president of Practical Perspectives and author of the report, also expects this number to grow.
