Adviser Education a Priority in 2012

Financial services firms are making adviser education a priority and expanding the scope of retirement goals, a survey found.

According to the Hearts & Wallets 2012 Retirement Income Competitive Landscape Survey, which captured retirement income priorities of nearly two dozen financial services firms in spring 2012, financial firms said adviser education was most important (32%) or very important (27%) in helping with retirement income planning.

“I think people are realizing that the adviser is really the linchpin here,” Chris Brown, principal at Hearts & Wallets, told PLANADVISER.

This emphasis on adviser education seems to be increasing, Brown said, as 2012’s survey showed the highest results for adviser education being “most important.” The same question in a 2010 survey found that 22% of firms said adviser education was most important and 35% said it was very important. In 2007, 27% of survey respondents said it was most important, and 37% said it was very important.

Hearts & Wallets found that advisers need more support to execute expanded scope, and illustrate tradeoffs, annuity optimization and advice on account drawdown and savings. It also saw a trend in offerings being expanded to present the whole financial picture, including health (life and long-term care insurance included), taxes, real estate, lifestyle considerations (estate planning and couples’ dialogue), and optimal timing on how to take Social Security.

“Firms are responding to investor needs to assess their entire financial picture from when to take Social Security to real estate, taxes and health care, reversing a pullback we saw in 2010,” said Laura Varas, Hearts & Wallets principal. “As the scope and offerings of retirement income expand, advisers will be supported with more training and smart tools. And firms are finally beginning to devote more resources to young and mass-market investors.”

The importance of marketing and/or developing retirement income offerings jumped in importance 39% among strategic priorities in just two years, according to the survey. In 2012, 77% of firms rated retirement income as vital or very important to strategic planning initiatives over the next one to three years, compared with 57% in 2010.

Brown said this year the industry “definitely saw a broadening of scope in terms of the [retirement income] solutions that are offered out there."