Data & Research April 2, 2008

Most Americans Not on Track with Retirement Planning

Only one-third of respondents to a survey by Bank of America are on track with their retirement planning efforts, and nearly one-quarter (23%) report they have not started planning at all.
Reported by

According to a press release about the survey of approximately 1,000 people across the country, nearly one-third (30%) of Americans say that starting retirement planning is difficult, while 29% say the same about starting a fitness routine and 28% say the same about starting a diet. Only one-third of survey respondents report they are on.

Respondents identified difficulty with respect to determining the types of investments they should make (42%), how much they will need to retire comfortably (40%), when to retire (33%), and where to begin (32%), the release said. Among affluent Americans surveyed, 34% reported difficulty with identifying appropriate retirement investments and 24% say they struggle with knowing how much they will need to retire comfortably.

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The survey also found that despite Americans’ general familiarity with retirement products, many are not taking full advantage of them. Most Americans (79%) reported being familiar with 401(k) plans, but of those with access, 22% do not participate. Additionally, 68% of Americans report being familiar with IRAs; however, only 40% report having one. Less than half of Americans with IRAs (43%) fund them each year.

Among affluent Americans, 84% report they are familiar with traditional IRAs, and 62% say they are familiar with Roth IRAs; however, only 56% currently incorporate an IRA in their retirement planning. While affluent Americans are more likely to have an IRA than the general population, they are no more likely to fund it annually.

The survey was conducted by Braun Research via telephone between the dates of March 7-13, 2008, with 750 nationally representative Americans and 250 individuals with investable assets between $100,000 and $3 million.

In Practice April 2, 2008

Economic Slump Leads Advisers to Asset Managers For Help

A recent study suggests current economic woes may lead financial advisers to rely more heavily on asset manager leadership.
Reported by

Consultant kasina surveyed financial advisers to determine their assessment of current economic uncertainties and found advisers are affected by the waning consumer morale. More than half of advisers say the economy is their greatest fiduciary concern for the upcoming year. However, less than half (41%) of advisers think the economy is headed for recession, while 34% are expecting a turnaround, and 26% are yet unsure.

Adviser uncertainty is echoed in their predictions for asset class performance. International equity garnered 29% of the confidence pool, with the remaining 71% diffused among the remaining asset classes.

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Asset Manager Reliance

kasina’s research found that, despite there being division and uncertainty among advisers, the vast majority still rely on asset managers for support and service. In fact, a significant 96% of advisers say that the ability of a fund company wholesaler to deliver an informed opinion at least somewhat impacts their transaction decisions.

Therefore, kasina noted, “asset managers have the potential to hold sway over advisers now more than ever. In the current pessimistic climate, asset managers must communicate clarity and thought leadership through all outlets in the distribution organization.”

For more information, please go to www.kasina.com.

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