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FPA Releases Annual Retirement Survey, Results Reveal New Planning Trends

Post a Comment December 9, 2009 – 11:02 am | Post Link |  Print This Post |

The Financial Planning Association^® (FPA^®) has released its “2009 Financial Adviser Attitudes and Perceptions About the Retirement Income Distribution Market” survey, published by FPA Press. The research was conducted by Diversified Services Group and sponsored by Nationwide Financial^® Institute of Retirement Income™.

The survey polled financial planners with clients who are in or near retirement and found that 40 percent of clients did have to make lifestyle adjustments – likely as a result of the economic downturn. The lifestyle changes were significant: 18 percent of clients delayed their retirement and 6 percent of clients who had previously retired, returned to work because of market changes over the past year and ever-rising health care costs which caused concern that they could outlive their savings and health care costs.

A combination of hectic market changes and a large number of baby boomers retiring also created a greater demand for retirement income planning. Sixty-three percent of respondents reported they provided retirement income planning advice, services and products to more than half of their client base in the last year. Almost half of the planners surveyed also said they gained between four and ten new retirement income clients in the last year.

“The demand for retirement income planning services is one way consumers are communicating their financial needs,” said Marv Tuttle, Executive Director and CEO of the Financial Planning Association. “FPA is in synch with what financial planners are experiencing and we are providing tools and resources to assist them and their clients in this important area.”

Additional survey findings include:

Planners say that of the time they spend on retirement planning, 50 percent is focused on retirement income related activities (as opposed to asset accumulation activities) such as calculating a client’s income needs, determining the appropriate asset allocation mix, developing a withdrawal strategy and selecting and processing optimum investment products and solutions.

• Planners are becoming more involved in helping clients manage health care costs – 79 percent of planners assist in client’s long-term care decisions.
• In previous years, many planners used a systematic withdrawal approach as the primary planning strategy, but now planners are implementing more personalized approaches: more than a third of planners reported using a time-based segmentation approach, while 14 percent use an essential versus discretionary income approach.

“The behavioral change that is occurring in the marketplace is interesting to watch. Three or four years ago, 8 out of 10 planners used the systematic withdrawal approach, now only four out of 10 are using that strategy,” said Brad Davis, vice president of retirement income solutions at Nationwide Financial. “This survey will help guide us as we develop new tools and resources for planners to address their clients’ retirement income needs.”

More survey details are featured in Retirement Distribution Planning, a supplement to the December issue of the Journal of Financial Planning. The full survey is available for $5,000 for FPA institutional members ($7,500 for nonmember firms) through the FPA Research Center.

FPA has been conducting research since its inception in 2000. The FPA Research Center was officially formed in 2007 to further empower the financial services sector with knowledge and an understanding of the financial planning process, including how it affects consumers, planners and firms.

Nationwide, based in Columbus, Ohio, is one of the largest and strongest diversified insurance and financial services organizations in the U.S. and is rated A+ by A.M. Best. The company provides a full range of personalized insurance and financial services, including auto insurance, motorcycle, boat, homeowners, life insurance, farm, commercial insurance, administrative services, annuities, mortgages, mutual funds, pensions, long-term savings plans and health and productivity services. For more information, visit nationwide.com.