Wealthy Investors Question Adviser Expertise

The Spectrem study found 59% of investors said their adviser understands Social Security benefits, while 47% said their adviser is knowledgeable about Medicare.  

Identifying health care and living costs are only a fraction of the concerns investors face as retirement looms near. How to pay for them is another ballpark.


A recent study from Spectrem, “The Convergence of Health and Wealth,” examined American life expectancies and costs associated with it, finding that as life longevity among American workers increases, so does the price in health care services—hundreds of thousands of dollars or more. Participants in the survey are wealthy investors, with a household net worth between $100,000 and $25 million (not including primary residences), and 51% of non-retired investors expect medical fees to be their largest expense in retirement, according to the study. Twenty-two percent expect housing bills to be their largest expense, and nearly three out of four investors (73%) believe changes in their health or home life will be their most significant cost in retirement.


Spectrem also found wealthy investors lack some faith in their advisers. Fifty-nine percent said their adviser is knowledgeable in Social Security benefits, while 47% said their adviser sufficiently understands Medicare benefits. The news isn’t ideal for the 17% of working investors surveyed, who expect Social Security to be their primary source of funding health care expenses, or for the 25% who expect this to be Medicare. Other investors said pensions (18%) and savings and investments distributions (28%) will provide health care funding.


However, working investors are taking an initiative to learn about their retirement benefits. Based on a 100-point scale, survey respondents ranked 67.22 for understanding Social Security benefits, 59.09 for Medicare benefits, and 49.77 for assisted living options.


“As life spans increase, investors will require more money to remain financially secure through the end of their lives,” says Spectrem President George Walper, Jr. “The most daunting uncertainty they face is the cost of health care, which can be extraordinarily difficult to predict. Retirement living is another issue, as investors are uncertain where to turn for information on assisted living or continual care options. And, while one of their sources of information is their financial adviser, investors are not convinced their adviser has sufficient knowledge to provide sound advice. Advisers would be well-served to demonstrate their expertise in assisting older investors with this type of planning.”