Page 45 - Investment Advisor March 2021

5 Ways COVID-19 Has Increased
3. Managed accounts will continue to grow.
Stofer believes managed accounts will
continue to grow. “One reason managed Women’s Retirement Worries
accounts are becoming more popular is
it is a way to provide advice and educa- omen seem to shoulder much of was losses in their portfolio due to
tion to the participants, even though Wthe worry when it comes to how COVID-19. However, the same share
it’s not as much about managing the COVID-19 is affecting the economy — of respondents, 36%, said protecting
money,” he said. and the impact on their finances, thus their assets was a top concern, versus
A Vestwell survey found that one their future and retirement — according 26% in 2019.
in four advisors plan to offer managed to a 2020 study by Nationwide. In 2019, the cost of health care was
accounts this year. Schumm noted that “For several consecutive years, our a major concern of 36%, which fell to
“it is a way to incorporate a more per- Advisor Authority study has revealed 21% in 2020. Also key in 2019 was sav-
sonal advice solution aside from your the disconnect between women’s ing enough for retirement, 24%, which
traditional target date offerings.” growing concerns about their ability dropped to 16% in 2020.
He added that there were some rea- to retire and their level of preparation
sons managed account acceptance has — and the pandemic has taken this to 3. The pandemic is driving women’s
been slow: Technology incorporation new levels,” said Ann Bair, senior vice need to find more guaranteed solutions
was weak, which made the accounts president of marketing for Nationwide for the future.
“cost prohibitive.” Financial, said in a statement. “While Annuities made inroads, the study
This is changing, he says, and it’s a women are acutely aware of the chal- found, with 59% of women stating they
“much easier conversation” for an advi- lenges they face, it’s critical that they would feel more secure if a portion of
sor “to take someone from a target date take steps now to address gaps in their portfolio was invested in an annuity to
plan and roll them out to a personal retirement plan, especially as we start help protect against market risks. Also,
wealth account over time.” a new year.” 55% stated they would feel more secure
The sixth annual study polled 2,500 if they had invested a portion of their
4. Decumulation options will be part of women and men, including 1,768 advi- portfolio in an annuity to help “protect
retirement plans. sors and financial professionals and 817 against outliving their savings.”
Decumulation, especially with an aging investors. The investors included 520
population, will grow in importance, men and 297 women. The online survey 4. Diversification is the main strategy
Stofer said. was conducted by Harris Poll from May both women and men use to protect
“[Although] 401(k)s have been suc- 27 through June 25, 2020. assets against market risk.
cessful and people are saving money, as Here are five key finding of the study: A majority of those surveyed — 52% of
an industry, we haven’t done a great job women and 59% of men — stated that
of helping people on the spend down,” 1. Women were more concerned in 2020 diversification was the main strategy
he said, adding that the decumulation about a recession and a bear market they used to protect assets. Fixed annui-
side of retirement savings is “every bit as than they were in 2019. ties were more popular with women,
important as the accumulation.” Findings showed that 82% of women 39%, versus 34% for men. Fixed indexed
When asked about annuity products, polled were concerned about a U.S. eco- annuities were used by 26% of women
he said they have a bad rap because nomic recession over the next 12 months versus 15% of men.
some are bad but many have been sold versus 60% in 2019. Again, this poll was
wrong. “There are some good solutions done in May and June 2020, with the 5. The pandemic hurt the retirement
out there if properly sold,” he said. March stock plunge still vivid. Also, 74% savings of most women.
Schumm agreed. “Being able to of women worried about an ongoing Taking into account the timing of the
incorporate that from kind of a soft U.S. bear market in the next 12 months study, it’s not surprising that 72% of
landing managed outcome to a guar- versus 57% in 2019. women said the pandemic had a nega-
anteed income type structure in some- tive impact on how long they will be
one’s career has not really been nailed 2. Women said portfolio losses were able to live off their current retirement
yet,” he said. “[But] there’s a lot of their top financial concern. savings. Eighteen percent said there was
people working on it. A lot of people It’s no surprise that one of the two no negative impact, and 10% said they
talking about it.” largest financial concerns in 2020 didn’t know.

MARCH 2021 INVESTMENT ADVISOR 43