Big Jump Measured in Share of Advisory Clients in Retirement

“Given so many Baby Boomers are retiring or preparing for retirement, it is not surprising that advisers are seeing more of their business dominated by the needs of these consumers,” says Jafor Iqbal, assistant vice president, LIMRA Secure Retirement Institute. 

Half of all financial advisers polled by LIMRA Secure Retirement Institute say the majority of their business consists of pre-retiree and retiree financial planning, up a whopping 40% over 2011.

While targeting younger clients will obviously be important for long-term business sustainability, according to the Institute’s estimates, “retiree households will control more than half of all investable assets (approximately $25 trillion) by 2023.”

“Managing these assets and their de-accumulation for their clients will be very important for the foreseeable future,” Iqbal explains.  

LIMRA Secure Retirement Institute also found advisers have expanded their retirement income planning services significantly since 2011, especially as it pertains to the number of advisers offering Social Security claiming strategies. The group offering such services has more than doubled in size since 2011, jumping from 33% of advisers to 70% of advisers in 2016.

Other increasingly popular elements of elder client service include advice on required minimum distribution (RMD) planning, long-term care, sequence of withdrawal planning and defined benefit pension claiming strategies. According to LIMRA polling, all of these categories saw double-digit growth over the last five years, and overall, eight in 10 advisers say they are spending more time on retirement income planning.

NEXT: Other service elements remain the same 

While some aspects of advisers' businesses have shifted significantly since 2011, LIMRA Secure Retirement Institute also finds both advisers and consumers still believe minimizing the risk of running out of money and reducing portfolio volatility are two of the three most valuable services an adviser can provide.

“Researchers found that while advisers consider offering a realistic view of retirement lifestyle a valuable service, consumers say creating a formal written retirement plan is more important,” Iqbal says. “Interestingly, advisers surveyed in 2011 listed formal written retirement planning as the second most valuable service, which aligns with consumers’ perspectives.”

For those who are offering formal written retirement planning services, nine in 10 advisers say it “helps them better understand their clients’ goals, improves retention and increases their clients’ confidence in their retirement readiness.”

When asked about the potential impact of the Department of Labor fiduciary rule, the majority of advisers (55%) “acknowledge that the new rule will likely deter them from serving small investors and half say they will stop handling small rollover business.”

“We are also concerned that the new DOL fiduciary rule may have a negative effect on advisers’ willingness to recommend guaranteed lifetime income products to their middle income clients,” Iqbal concludes.

Additional data and other research is at