Surveys show Americans prefer retirement planners, lack plans

Short-term stock pickers need not apply. What consumers really want is retirement income planners. And highly credentialed, knowledgeable ones at that.

According to the survey released Wednesday by the Granum Center for Financial Security, retirement income planning was the service that was most desired by both older and younger consumers (71%), and was equally popular among men and women. Meanwhile, 3 out of 10 consumers (31.3%) chose “understanding how much I can safely spend in retirement” as the top service they want from a financial adviser.

The study also showed that 27.1% of consumers listed “knowledge” as the attribute that's most important to them when they're picking a financial adviser, and half (49.2%) cited knowledge as one of the top three characteristics.

“Looking at the data, we see a clear need for further education and specialized knowledge in retirement income planning — it is what consumers want, and it is what advisers in the RIA community think is valuable,” Michael Finke, professor of wealth management and director for the O. Alfred Granum Center for Financial Security at The American College of Financial Services, said in a statement.

A separate study looking at RIA growth and specialized knowledge showed RIAs are getting the message that their clients expect them to know how to prepare them for retirement. The study revealed that retirement income planning is the area independent advisers “most want to grow in advanced expertise”, followed closely by issues facing a similar clientele like estate planning and advanced tax planning.

On the topic of advanced knowledge or specialization, nearly three in five (58.5%) independent advisers at RIAs strongly agree that expertise obtained by pursuing a financial services designation has helped advance their career, according to the study. And professional designation programs (66.6%) are among the most preferred education formats for applied specialized knowledge.

“Continuous learning is critical to the growth and success of investment advisers whose value is more linked to integrated planning services than active security selection,” Finke added.

Nearly 400 advisers at RIA firms participated in the American College of Financial Services’ survey on RIA growth and knowledge, while the Granum Center for Financial Security’s survey reflects responses from more than 1,150 consumers.

WHAT WE NEED IS A PLAN ... AND MORE MONEY

As RIAs stream back into the classroom to study advanced retirement planning skills, the math problem confronting their clients grows simpler: They need more money to retire.

According to the Schroders 2022 U.S. Retirement Survey released Tuesday, working Americans say on average it will take $1.1 million in savings to retire comfortably. However, 56% of those surveyed say they expect to have less than $500,000 saved, including 36% who expect to have less than $250,000. Only about one-quarter (24%) expect to reach the $1 million mark, according to the study.

Last year, the percentage of working Americans nearing retirement age (60-67 years old) who said they have enough money to retire was 26%. As a result of spiking inflation, that number has declined to just 22% this year, according to the study. 

“These are seriously challenging times, and they seem to be taking a toll on the American worker and their belief about achieving a comfortable retirement,” Joel Schiffman, head of intermediary distribution for North America at Schroders, said in a statement. “This year, inflation is the number one concern Americans have about their retirement, and next year, it may be something else.”

One thing that might help those workers feel better is having a plan for how to achieve their retirement goals. The Schroders survey found that less than a quarter of respondents (23%) had a written retirement plan to guide their decisions, while 40% said they had done some planning but don’t have a formal plan, and 37% have not done any planning. 

Among those without a plan, 76% say the idea of planning is overwhelming while 56% say it doesn't make sense given that life is so uncertain.

“Given the relatively small percentage of Americans who have taken the time to create a specific plan for generating enough assets for retirement, it’s not surprising to see that many believe a dream retirement is out of reach,” Schiffman said. “As an industry, we need to drive the benefits of planning, of investor education, of starting sooner to save in defined contribution plans and IRAs and investing for growth.”

The survey, conducted Feb. 17-28, reflects responses from 1,000 U.S. investors ranging from 45 to 75 years old.