Investors whose financial advisers have presented them with detailed, written retirement income plans rate them highly, yet only 18% of pre-retirees who work with an adviser have a retirement income plan, a survey of 500 retirees, pre-retirees and advisers by
More startling, perhaps, is the fact that among those 18% who have a retirement plan, only half (53%) have detailed, written plans. In other words, only 9.5% of investors who work with an adviser have a comprehensive, written retirement plan.
And among this minority of investors who have such written plans, they generally entrust more money to their advisers, according to the survey, “Fidelity Retirement Redefined.”
Advisers are missing out on a key opportunity, Fidelity said, as 81% of pre-retirees said a detailed plan is important.
Of those few pre-retiree investors who have written, detailed retirement income plans, 63% said they were “very satisfied” with their advisers, and among retirees, 69% were “very satisfied.”
The “very satisfied” pre-retirees consolidated an average of 72% of their savings and investments with their primary adviser, and the “very satisfied” retirees consolidated 81% of their assets.
Seventy-nine percent of the “very satisfied” pre-retirees and 83% of the “very satisfied” retirees referred business to their adviser.
“Our survey found that advisers face a range of challenges that can make writing a retirement income plan feel extremely complex—and for that reason, many are opting for more informal planning processes,” said Larry Sinsimer, senior vice president, practice management for Fidelity Investments Institutional Services Company. “Yet, investors are telling us that those advisers who can help them address the complexities of retirement planning—in writing—will secure their loyalty, referrals and business.”
However, actually putting the retirement income plan to work remains a challenge, Fidelity found. While 80% of retirees with a detailed, written retirement income plan said they would follow at least some of the plan’s outline, advisers pointed to a number of realities that often derail such plans.
These include: a disconnect between spouses, financial obligations to other family members, lack of clarity for the type of lifestyle they want to lead in retirement, a reluctance to tap into their savings and, finally, greater concentration on their retirement balance than on how to turn that into lifetime income.
“Retirement assets are going to flow to the adviser with the credible solution for retirement income planning, which does not have to be a complicated solution,” Sinsimer said. “Advisers today should be focused on how they are going to leverage written income plans to become their client’s primary, most trusted adviser prior to and throughout retirement.”
Fidelity plans to follow up on this survey with workshops and webinars for advisers on how they can address this retirement income challenge and better serve their clients in person.
