Working With Adviser Boosts Confidence Even Among Affluent

Even for the rich, working with an adviser to develop a written plan boosts retirement confidence, LIMRA study finds.

Just because affluent Americans approach retirement planning with far more assets than average savers doesn’t mean they are not anxious. In a study, the LIMRA Secure Retirement Institute found nearly 70% of affluent consumers said maintaining their lifestyle in retirement was a top financial goal.

More than 80% of the affluent are confident they will be able to live their desired lifestyle in retirement, but despite substantial assets, only 4 in 10 are “strongly confident.” The reasons range from market volatility and rising inflation to living longer in retirement and unexpected events.

The study found those who work with an adviser to develop a formal written plan to manage their assets experience increased confidence. About half of those with written plans (54%) said they were “very confident” about living their desired lifestyle in retirement.

In fact, that written plan seems to kick off a cycle of positive feelings and behavior, a kind of trust flowchart. The confidence sparks adviser satisfaction with the adviser, which fuels trust in the adviser, leading to more business. Only half of affluent consumers, however, have a formal written plan.

The study pointed out that once a written plan is in place, both adviser and client can pursue realistic planning and improve preparation for retirement. With a plan, 30% of affluent households feel “extremely well prepared” for retirement compared with only 17% who do not have a plan.

As confidence and preparation rise, the actions that follow benefit both client and adviser. Forty percent of those with a plan give their advisers perfect scores on satisfaction measures versus 14% of those without a written plan. In turn, clients have more trust in the advice they receive and look to consolidate more of their assets with their adviser: 55% of clients consolidated three-quarters or more of their assets with their adviser. 

The LIMRA Secure Retirement Institute looked at American investors at three asset levels: $500,000 to $999,999; $1 million to $3.5 million; and $3.5 million-plus. More information is at LIMRA’s website.