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A majority of advisers surveyed (61%) indicated that their clients are not concerned with covering basic needs in retirement, but with having to give up luxuries such as traveling and dining out, according to a press release. More than half of the financial advisers surveyed said a majority of their clients are delaying retirement. Forty-six percent cited loss of assets in late 2008 and early 2009 as the number one reason clients are postponing retirement, while 40% of advisers cited health care costs. “While the market upheaval shook both investor portfolios and confidence levels, advisers in our survey reveal that their clients have not pared down their expectations for their golden years, choosing to delay retirement rather than scale back their lifestyle plans,” said Matthew Leung, director and head of practice management programs at MainStay Investments, in the press release. Responding to the Downturn The market crisis also revealed the true risk tolerance profile of many clients, as more than half of the surveyed advisers (60%) indicated too much exposure to equities has been a major issue. As a result, almost all advisors (91%) have made changes to their clients’ retirement portfolios. Mutual funds still rank the highest as advisers’ (85%) investment product of choice for funding client retirement, but guaranteed income products, such as guaranteed lifetime annuities, were cited by more than 60% of advisers as part of their new portfolio strategy to help clients meet retirement income needs. Additionally, the survey found that three-quarters of advisers are providing guaranteed lifetime annuities to at least some of their clients as a retirement income solution. For those not currently incorporating these annuities into their clients’ portfolios, 20% are planning to do so in the near future. The survey shows there remains a need for clients to be educated. Advisors say less than half of their clients know how much money they actually need to supplement social security, for instance, while 60% of advisers agree that helping clients understand withdrawal rates will be a top priority. The study was conducted online within the United States by Harris Interactive between December 8 and December 14, 2009, among more than 500 financial advisers from Harris Interactive’s Financial Advisor Intermediary panel. Of the survey respondents, 91% are wirehouse advisers and 9% are independent advisers.
A majority of advisers surveyed (61%) indicated that their clients are not concerned with covering basic needs in retirement, but with having to give up luxuries such as traveling and dining out, according to a press release.
More than half of the financial advisers surveyed said a majority of their clients are delaying retirement. Forty-six percent cited loss of assets in late 2008 and early 2009 as the number one reason clients are postponing retirement, while 40% of advisers cited health care costs.
“While the market upheaval shook both investor portfolios and confidence levels, advisers in our survey reveal that their clients have not pared down their expectations for their golden years, choosing to delay retirement rather than scale back their lifestyle plans,” said Matthew Leung, director and head of practice management programs at MainStay Investments, in the press release.
Responding to the Downturn
The market crisis also revealed the true risk tolerance profile of many clients, as more than half of the surveyed advisers (60%) indicated too much exposure to equities has been a major issue. As a result, almost all advisors (91%) have made changes to their clients’ retirement portfolios.
Mutual funds still rank the highest as advisers’ (85%) investment product of choice for funding client retirement, but guaranteed income products, such as guaranteed lifetime annuities, were cited by more than 60% of advisers as part of their new portfolio strategy to help clients meet retirement income needs.
Additionally, the survey found that three-quarters of advisers are providing guaranteed lifetime annuities to at least some of their clients as a retirement income solution. For those not currently incorporating these annuities into their clients’ portfolios, 20% are planning to do so in the near future.
The survey shows there remains a need for clients to be educated. Advisors say less than half of their clients know how much money they actually need to supplement social security, for instance, while 60% of advisers agree that helping clients understand withdrawal rates will be a top priority.
Rebecca Mooreeditors@plansponsor.com
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