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Advisorsexpand retirement income planning services to meet needs of their clients


BOSTON, Mass.,Adv and Ret Planning May 5, 2016—Half of all financial advisorssay the majority of their business consists of pre-retiree and retireefinancial planning – nearly 40 percent higher than in 2011, according to a new LIMRASecure Retirement Institute study.

“Given so many Baby Boomers are retiring or preparing forretirement, it is not surprising that advisors are seeing more of theirbusiness dominated by the needs of these consumers. The Institute estimates that retireehouseholds will control more than half of all investable assets (>$25 trillion)by 2023,” said Jafor Iqbal, assistant vice president, LIMRA Secure RetirementInstitute. “Managing these assets andtheir de-accumulation for their clients will be very important for theforeseeable future.”

The study found advisors have expanded their retirementincome planning services significantly since 2011. In particular, the number of advisors offeringSocial Security claiming strategies has more than doubled (33 percent in 2011vs. 70 percent in 2016).  In addition, requiredminimum distribution (RMD) planning, long term care, sequence of withdrawalplanning and defined benefit pension claiming strategies all saw double-digitgrowth over the last five years. Overall, 8 in 10 advisors say they arespending more time on retirement income planning.

Both advisors and consumers believe minimizing the risk of runningout of money and reducing portfolio volatility are two of the three mostvaluable services an advisor can provide in 2016. But researchers found that while advisorsconsider offering a realistic view of retirement lifestyle a valuable service,consumers say creating a formal written retirement plan is more important. Interestingly, advisors surveyed in 2011listed formal written retirement planning as the second most valuable service,which aligns with consumers’ perspectives. 

Forthose who are offering formal written retirement planning services, 9 in 10 advisorssay it helps them better understand their clients’ goals, improves retentionand increases their clients’ confidence in their retirement readiness. Earlier this year, an Institute consumer surveyrevealed pre-retirees and retirees with a formal written retirement plan arenearly three times as likely to feel veryprepared for retirement compared with those without one (50 percent vs 17percent).

On average, advisors recommend theirclients invest one quarter to one third of their portfolio into guaranteedlifetime income products. Yet while 9 in10 advisors agree that guaranteed lifetime income products provide clients‘peace of mind’ in retirement and feel it is important to own them, there isalso substantial resistance not to use the products in a clients’ portfoliobecause these products offer less flexibility: Nearly 4 in 10 advisors say thatguaranteed lifetime income products compromise their ability to manage aclients’ portfolio as circumstances change. 

When asked about the potentialimpact of the Department of Labor fiduciary rule, the majority of advisors (55percent) acknowledge that the new rule will likely deter them from servingsmall investors andhalf say they will stop handling small rollover business.

“We are also concerned that the new DOL fiduciary rule mayhave a negative effect on advisors’ willingness to recommend guaranteedlifetime income products to their middle income clients,” noted Iqbal.

 According to prior Institute research, 9 in 10U.S. middle market households (assets between $100k-$249K) have assets in adefined contribution plan or an IRA and the majority of them expect to rely onthose assets to fund their retirement.

The 2016 Advisor Survey was fieldedin February and March 2016 and included 1,004 advisors who work primarily withindividual investors. Advisors included broker dealers in a firm registeredwith the SEC and a member of FINRA, dually-registered financial advisors whocan act as both registered investment advisors and as registered broker-dealers,and registered investment advisors (RIAs).


About LIMRA Secure RetirementInstitute    

LIMRA Secure RetirementInstitute provides comprehensive, unbiased research and education about allaspects within the retirement industry to improve retirement readiness andpromote retirement security. For more information, please visit

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