Securities America to Boost Web-Based Coaching on Retirement (Part 1)

SA 's launched its Income for Life model in 2005. This software can be used with the more complex Managed Opportunities NextPhase program, which has management and tracking capabilities.

The latter's tracking and reporting feature lets FAs keep on top of whether a plan is meeting a client's goals, allowing for needed adjustments. As one portfolio segment reaches the target market value needed to generate income during a specific period, SA says, "The investment in that segment can be harvested to help ensure future income without continued exposure to market volatility."

SA recommends that advisors use a time-segmented distribution strategy for most client income needs while "providing additional income through guaranteed income sources."

Designed for consistent income throughout retirement, the time-segmented approach typically splits assets into five-year periods. Each segment is constructed and managed as an individual portfolio with its own investments, with all investments working in sync to generate income.

"For the first years, you're in fixed products, allowing the rest of your money to build for those periods beyond 10 years," explains Parker. "That means there's less chance of having to pull the money out when [the investments] are down in value."

For advisors, the key benefit to this strategy is "helping to control clients' emotions," Parker says. "They're less concerned with market downswings and upswings, because they're not taking income from accounts that could be down in value."

In addition, "It controls the distribution process a lot better than when everything is in one account and you're drawing from it. When it's down in value, that causes emotional issues with the client–and it's not necessarily advantageous for the [financial] plan either," the Securities America executive says.