Experts broadly agree that accumulating money for retirement is relatively straightforward compared with the effort to structure sustainable retirement income for a post-work life that can last 30 years or more.
For that reason alone, it's worth asking whether the advisor who guided a client through the accumulation effort should be the one who guides the client through the spending phase. Advisors who are experts at helping their clients accumulate wealth may lack knowledge about the complexities of the retirement income phase.
Knowledge of Social Security claiming, Medicare, annuities and more are key elements of good in-retirement advice. So are insights about lifestyle planning, estate planning, long-term care, tax management and philanthropy. Ultimately, advisors who lack such knowledge may find themselves losing even long-tenured clients to true retirement experts.
This dynamic is explored by Jeff Levine and Ed Slott in the latest episode of their podcast series, "The Great Retirement Debate." During the episode, the financial planning experts consider why clients may want to change their advisor as they prepare for and enter retirement.
As Slott explained, the effort to prepare for retirement is a lot like climbing a mountain; the job isn't done when one reaches the top. The climber also has to get back down safely, and a guide that can only help on the way uphill (the accumulation of assets) leaves a lot to be desired.
Slott is particularly critical of advisors who lack knowledge about advanced tax planning techniques that can help people make the most of their 401(k) plans and individual retirement accounts — especially Roth conversions.
"You really need to have an advisor who has this education," Slott emphasized. "The advisor needs to know the pros and cons of each potential distribution option and be able to explain it to you clearly, because these rules are among the most complex in the tax code."
Standing Out as a Good Retirement Advisor
Beyond giving insights to advice-seekers, Slott and Levine also offer tips for advisors who want to stand out among retirees — starting with the suggestion that they invest in themselves by seeking education and certification on these topics.
