Are financial advisors providing adequate retirement income planning?
To find out, researchers at LIMRA completed a survey in late 2009 and four focus groups in early 2010. The study sampled views of different types of advisors, over 900 in all, to determine whether they were conducting retirement income planning with clients and what challenges they felt impeded their ability to provide comprehensive retirement income planning. 
Overall, 9 out of 10 advisors said they conduct some form of retirement income planning services to clients and receive at least a third of their income through these activities.
About 40% of registered investment advisors and registered reps from broker-dealers indicated they spend at least half of their time on retirement income planning compared to 25% of other advisor-types surveyed (bank professionals and those describing themselves as financial planners or investment advisors).
With several million Americans entering retirement each year, it's not surprising that almost half of advisors said they are spending more time on retirement income planning than they did two years ago. It is also not surprising that 56% of those surveyed plan to spend more time on this in the next two years (see chart).
Many retirees are worried about how long their money will last in retirement. Advisors said this is a legitimate concern, especially since today's life expectancy charts suggest that people now age 65 have roughly a 50:50 chance of living to age 86.
Agents in the focus group were clear about the problem. "People have no clue about longevity risks and withdrawal rates so they need help," said one. Another said: "They come in and tell me they don't want to outlive their income."
Given this past year of economic turmoil, one may think that clients are flocking to advisors looking for guaranteed investments. The research found quite the contrary. Most of the advisors said clients aren't asking for guarantees (only 31% said clients do), because their clients don't believe in them or are skeptical of products claiming guarantees.
So, clients want safety and predictability, yet don't always understand what products they need to achieve this.
As one advisor observed: "People can't chase yield because (that makes them) give up on safety and security." But another suggested that "clients need to understand that retirement isn't about taking all your money and putting it in a conservative bucket and making it last. They need to continue investing in the right vehicles."
