A quarter of households aged 50-59 are "advice opportunity" households, a new study by Cerulli Associates shows.

"We define 'advice opportunity' households as those that indicated a need for more financial and investment advice, as well as a willingness to pay for advice services," Roger Stamper, senior analyst at Cerulli, explains. "As a group, investors aged 50-59 (23%) are the most likely to indicate they need more financial advice and that they are willing to pay for these services."

For those nearing retirement, ongoing advice is especially essential, the study points out. “Some early retirees really just need more handholding,” Stamper explains.  

But from the client perspective, is “handholding,” as Stamper calls it, worth the 1% to 3% of assets in advisor fees?

“While a lot of investors are wary of professionals, pre-retirees want help from advisors to avoid making big mistakes that could have long-term impacts,” Samper says, noting that that emotional support is often worth the price of an advisor for many clients. “Advisors should help clients focus on the complexities of planning for retirement, such estate planning and tax implications of client decisions,” he added.

Recent findings from BlackRock also show that 53% of Americans in their 50s and early 60s are more likely than any others, older or younger, to feel negatively about their financial future.

This group is often referred to as the sandwich generation, stuck between dependent kids and aging parents who need caregivers. Of those providing support to both an aging parent and a child, only 28% said they themselves live comfortably. The financial burden has been mounting in recent years, according to BlackRock, with increased pressure coming primarily from grown children rather than aging parents. This may be because the slow economic recovery has taken a toll on the wages and employment of young adults.

BlackRocks's survey found that this demographic is most likely to feel "not at all in control" of their financial future and "not at all confident" about making the correct savings and investment decisions.

Here’s what Stamper says advisors can do to better target this client demographic:

  • Early education: Advisors looking to onboard new clients can educate clients early on about retirement and how making good decisions early will help their long-term retirement outlook.
  • Decumulation: Most advisors are focused on accumulation but it's really just a means to an end of helping reach financial goals. Advisors must help clients shift focus to decumulation and how to maximize retirement assets to match clients goals in retirement.

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