Income Plan Seems to Be Relationship Key

Over half the respondents in a survey said they would consider switching or starting a new adviser relationship if the adviser developed a written retirement income strategy.

Americans working with a financial adviser are twice as happy and confident in their retirement income plans than those without, according to findings from the 2013 Franklin Templeton Retirement Income Strategies and Expectations survey.

Among survey respondents who work with an adviser currently, 90% describe themselves as happy with and 87% say they are confident in their retirement income plan, compared with only 44% and 44%, respectively, of those without a financial adviser.

The survey also uncovered a correlation between working with a financial adviser and understanding one’s retirement income plan. People who work with an adviser are much more likely to understand their retirement income plan (86%), compared with those who do not work with an adviser (48%). More than half of those who have developed a written retirement income plan (58%) know how much of their current income will be replaced by Social Security.

“The findings confirm that the most essential emotions surrounding retirement income planning – happiness with, confidence in, as well understanding one’s plan – are all increased substantially when you work with a financial adviser,” said Michael Doshier, vice president of retirement marketing for Franklin Templeton Investments. “Retirement income planning can be overwhelming, and professional assistance goes a long way in not only achieving financial goals, but feeling good about the process.”

According to the findings, retirement expertise is a key consideration when choosing a financial adviser. More than half of respondents (58%) cited experience with retirement planning as the most important factor when selecting an adviser.

Retirement income planning, in particular, is a key motivator for investors when it comes to making decisions on financial adviser relationships. Over half (51%) of respondents indicated that they would switch financial advisers or begin working with one for the first time if an adviser developed a written retirement income strategy for them. This was particularly true among survey respondents in key asset accumulation years, specifically, 65% of those ages 35 to 44 and 62% of those ages 25 to 34. 

Planning Top of Mind 

For top items on a wish list for working with an adviser, survey respondents indicated the desire to develop a retirement income plan to meet their expected expenses (33%), to have an understanding of their goals, concerns and fears about retirement (23%) and to select investments to match their retirement income plan and risk tolerance (19%).  

Many survey respondents are actively considering changes to their long-term financial plans. Over the next five years, almost a third (31%) anticipate changing their retirement strategy, while 22% plan to make changes in their retirement investments, and 13% anticipate beginning to work with a financial adviser for the first time.

Franklin Templeton’s Retirement Income Strategies and Expectations survey was conducted among a sample of 2,002 adults comprising 1,001 men and 1,001 women, ages 18 years and up. The online survey was fielded between January 10 and January 22, by ORC International’s Online CARAVAN. Highlights of the survey can be seen here.

Franklin Templeton Investments provides retirement investing, managing more than $175 billionin retirement assets.