Retiring Americans are facing increasingly complex financial decisions driven by a growing reliance on defined contribution savings and personal savings for retirement income. Large numbers of prospective and recent retirees turn to "financial advisers" for help to develop a retirement income plan and manage their retirement finances. These financial planners are the gatekeepers who determine what financial strategies to employ for retirement income and asset management before, at, and after the retirement inflexion point.
The FPA, in conjunction with DSG, recently completed the 4th annual quantitative study of the Financial Planner Channel. This study builds on qualitative, cross channel studies of financial advisers produced by DSG in 2005, as well as the series of annual quantitative studies of the Financial Planner and Bank Channels beginning in 2006. With its RM2 Report Series™, DSG has conducted syndicated research on a variety of topics concerning the 'Retirement Income Market' since 1997. This study continues to build on DSG's retirement market work and the FPA's increased focus on the retirement income market.
The 2009 quantitative study examines the practices of the Financial Planner Channel, regarding key aspects of the retirement management market, what drives increased interest in it, what financial planners want from their partners, and what they believe their clients want from them.
Research Project Background
The 2009 Study has been refined over prior years, based on results from previous surveys, the impact of the economic downturn, and input from the sponsoring organization and the Financial Planner Association. The Study also draws on DSG's RM2 Report Series™ for comparative reference points throughout the report.
To achieve a statistically significant sample size, 15,000 members of the FPA were selected at random and invited to participate in this online survey. DSG fielded the survey during August, 2009. A total of 460 FPA members participated. The aggregate profile of these participants is representative of the FPA membership with a plus/minus 5 percent margin of error and is comparable to the prior years' samples and participant numbers.
About the survey respondents
The overwhelming majority of the respondents are experienced planners who are knowledgeable of the retirement income market. More than half of their clients are either already retired or within five years from retirement. Eighty five percent of the respondents have clients with more than $250,000 in investable assets. In addition, the overwhelming majority (85%) of responding advisers have been working with retired or nearly retired clients for five years or more. The average age of respondents is 51 and 41% are in an IAR/RIA business model.
About the research findings
The study addresses key retirement market issues about financial planners such as:
- Time spent on retirement income guidance and its effect on adviser revenues
- The effect of the recession on the clients' attitudes, objectives and retirement plans
- The most commonly recommended retirement income products and withdrawal strategies
- The level of adviser confidence in the preparation of retirement income strategies and plans
- The evaluation and documentation process for retirement income plans
- Incorporating healthcare solutions into retirement plans
- Retirement income training elements
For Firms who purchase the complete Report, you will receive:
- A PDF copy of the 2009 study for unlimited distribution within your firm
- An Excel and PDF copy of the crosstabs which include the following banner points:
- Book 1: adviser experience, adviser business model/role, and compensation model.
- Book 2: time spent on retirement income activities (quartiles), time spent on asset accumulation activities (quartiles), number of new clients, and retirement income strategy.
- Book 3: clients who have delayed their retirement date (quartiles), clients who plan to become re-employed (quartiles), clients who needed to significantly adjust their lifestyle (quartiles), clients who made no significant changes (quartiles).
- Book 4: methods used to evaluate likelihood of retirement plan success including portfolio stress testing/sensitivity analysis, Monte Carlo or other simulation, rolling period analysis, home office review, industry accepted 4% withdrawal rate, and no evaluation.
- Book 5: adviser confidence in: their knowledge of retirement income strategies, products, services; retirement income expertise of product partners; retirement income-related investment recommendations; likely success of retirement income strategies; managing longevity, inflation and risk while drawing income; communicating with clients on retirement income issues; ability to provide adequate time/support to clients; ability to find good retirement income CE/training; and expertise in illustrating scenarios or using planning tools
Table of Contents
I. Executive Summary
II. Detailed Findings
a. Retirement Income's Growing Importance for the Financial Adviser
i. Time Spent on Retirement Income Activities
ii. Continued Demand for Retirement Income Services
iii. Retirement Income's Impact on Practice Revenues
b. The Impact of the Economic Downturn on Retirement Income Clients
i. Changes in Clients' Retirement Plans
ii. Client Fears and Retirement Risks
c. Planning Strategies for Retirement Income
i. Retiree Investment Objectives
ii. Withdrawal Strategies for Retirement Income
ii. Withdrawal Strategies for Retirement Income
iii. Sustainable Withdrawal Rates
iv. Retirement Income Product Recommendations
v. Managing Healthcare Costs
vi. Evaluating Retirement Income Plans
vii. Documentation & Procedures for Retirement Income Planning
viii. Importance of Products on Technology Platforms
III. Respondent/Client Profile
IV. Conclusion |
Sample Directory of Exhibits Contained in the Report
Exhibit 1: Time Spent on Retirement Income vs. Accumulation Related Activities.
Exhibit 2: Time Spent on Retirement Income Activities.
Exhibit 3: Time Spent on Specific Retirement Income Planning Activities.
Exhibit 4: Percentage of Advisers' Total Time Spent on Retirement Income Related Activities.
Exhibit 5: Percentage of Clients Receiving Retirement Income Products, Services, or Guidance.
Exhibit 6: Percent Change in These Clients from Previous Year.
Exhibit 7: New Retirement Income Clients Added.
Exhibit 8: Percentage of Revenue Growth over Next Five Years as a Result of Offering Retirement Income Products, Services, or Guidance.
Exhibit 9: Percentage of Clients Who Have Consolidated More Assets With their Adviser After Receiving Retirement Income Products, Services, or Guidance.
Exhibit 10: Change in Revenue as Clients Transition from Accumulation to Income.
Exhibit 11: Expected Revenue Increases—2009 vs. 2008 Studies.
Exhibit 12: Changes in Retirement Plans.
Exhibit 13: Reasons for Changing Retirement Plans.
Exhibit 14: Retiree Investment Objectives.
Exhibit 15: Choices of Generic Withdrawal Strategies.
Exhibit 16: Income Draw Down Strategies.
Exhibit 17: Reliance on Pension or Social Security.
Exhibit 18: Sustainable Withdrawal Percentage from Retirees' Portfolios.
Exhibit 19: Retirement Income Planning Options Recommended.
Exhibit 20: Products Often Recommended for Retirement Income.
Exhibit 21: Managing Health Care Costs.
Exhibit 22: Evaluating Retirement Income Plans
Exhibit 23: Documentation of the Retirement Income Plan
Exhibit 24: Importance of Integrating Product on Technology Platform
Exhibit 25: Confidence Levels in Retirement Income Planning
Exhibit 26: Confidence Levels in Retirement Income Planning, by Tier
Exhibit 27: Retirement Income Resources
Exhibit 28: Activities to Grow the Retirement Income Business
Exhibit 29: Respondent Profile
Exhibit 30: Details on Respondents' Typical Clients
How This Research Study Can Help Your Company
The study results will show subscribers what they must do to work more effectively with financial advisers to ensure that their advisers, in turn, can serve their clients and attract the greatest possible portion of retirement assets.
It is designed to help strategists and marketers determine optimum approaches to asset distribution planning and retirement income management through intermediaries.
Key Benefits for Subscribers to the Report
- Keep abreast of financial planners' understanding and views about the retirement income market, including implications and effect of the economic turbulence on retirement income planning.
- Learn the pace at which financial planners are adopting or plan to incorporate retirement income products and services and learn what your firm can do to secure a leadership position in this emerging and fast-changing marketplace.
- Learn what "retirement income" products and services financial planners currently use.
- Be better able to prepare advisers for challenges in the marketplace, which may be particularly important based upon economic events over the last year.
- Learn what type of marketing and educational support financial planners value most and what tools they need to maximize potential revenue growth.
Deliverables and Pricing
The completed written Report is available in electronic PDF format and hard copy for $7,500. (Note: Financial Planning Association (FPA) member firms, Retirement Management Executive Forum (RMEF) member firms, and DSG client firms can obtain a copy of the entire Report for the reduced fee of $5,000).
For more information about this quantitative research project and/or a subscription to the Report, please contact Borden Ayers by calling 610-989-1710 x 21 or by sending an email to bordena@dsg-network.com.
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