Companies Start Income Ed For Boomer Advisors–Finally
Donald Haas, a financial gerontologist and president of Haas Financial Services, Southland, Mich., spends a lot of time speaking with financial advisors and product providers about retirement income planning for baby boomers and others.
What he is finding is that a few providers of income products, solutions and services have started ramping up to educate advisors on this market–but only a few. "Most advisors are still not aware" and they need the education, he says.
Other experts interviewed for this article report the same.
"Things are in the works, and there's a 'stay-tuned' message, but it's still in the very early stages of development," says William Borden Ayers, principal of the Retirement Management Market Practice of Diversified Services Group, Wayne, Pa.
"The companies are feeling their way on this, because it's uncharted waters…and it's complicated by regulations on advisors." Further, retirement income management is different than asset accumulation, and clients need a different set of solutions.
But it's critical that companies move forward on this, he says. The oldest boomers are reaching age 60 and many are getting ready to take income, he points out, and "advisors are the ones to whom boomers will turn for help."
Financial companies need to do more than just talk about income planning opportunities, Ayers insists. "They need to provide advisors with education and tools they need to do this type of work."
He is referring to tools that help boomer clients fully understand how retirement is changing and the importance of income management; that help advisors do the actual planning; and that provide ongoing plan monitoring and maintenance.
Third-party providers, including marketing organizations, software companies and professional designation programs, do offer tools, Ayers allows. But companies need to be there, too, he says.
As noted, a few companies are stepping up to the plate. One is Lincoln Financial Group, Hartford, Conn. It just has launched a series of "retirement income summits." Held in different cities, these summits train advisors on an "income planning process," says Heather Dzielak, vice president-individual annuities business line leader at Lincoln National Life Insurance Company, a Lincoln Financial group affiliate.
Each session offers 4 hours of education (with continuing education credits) on retirement income management plus take-home, action-oriented kits and tools (scripts, questions to ask, etc.) to use in working with clients. The sessions will help advisors "seize the opportunity" in the income market, Dzielak says. Advisors also learn how creating retirement income security for clients will impact their own practice, she says.
The program took 9-12 months to develop, and Dzielak says follow-up and development will run 12-18 more months.
Why such intense focus? "This is our business, going forward," she explains. "It's our long-term focus."
The education effort is definitely on the how-to, indicates Matthew Sharpe, chief marketing officer of the retirement income and investments business of Genworth Financial, Richmond, Va.
This is a huge shift from 3 years ago, he recalls, when building awareness was the main focus and when "hardly anyone knew what annuitization was."
Now, awareness is there, and providers have been morphing existing products into something that delivers income, he says. Examples include securities firms and banks that are promoting income arrangements through managed money accounts, deferred variable annuities and sometimes variable immediate annuities; and insurers that are concentrating on VA withdrawal features, annuitization features and, for fixed accounts, single premium immediate annuities to meet income needs.
(Genworth itself recently did a morph. It embedded an annuitization option–a group annuity called Clear Course–into its 401(k). The option lets participants move money in and out, as with any other VA subaccount, and it also allows annuitizing for guaranteed income purposes.)
More recently, firms are moving to "integrate everything into a service model," complete with education, says Sharpe. Genworth is doing this at 3 levels:
–Educate senior management and distributors on retirement income and its impact on the client portfolio.
–Educate producers on how to transact income business. "We provide case studies and CE classes (through the income management course co-developed by National Association for Variable Annuities and InFRE)," he says.
–Educate individual producers via a dedicated retirement income team.
