Big demand from advisers for Social Security claiming tools, training

But few are willing to pay for it

Jul 7, 2014 @ 10:00 am

By Mary Beth Franklin

Although most financial advisers provide near-retirees with some guidance on Social Security claiming decisions, many need to increase their knowledge and skills in this increasingly important area, according to a new study released Monday by Practical Perspectives and GDC Research.

The report “Social Security Support and Financial Advisors — Insights and Opportunities 2014” examined how advisers typically work with clients on Social Security issues and evaluated the types of support currently provided to financial advisers by product manufacturers, distributors and specialized service firms.

Based on input from more than 600 financial advisers to an online survey in May, the report found that demand for support is significant, with roughly three in four advisers saying they are likely to seek out additional support, content or tools related to Social Security in the next 12 months.

Despite this interest, advisers rely primarily on free support tools from the Social Security Administration, online calculators and general planning software, according to the survey. Only 13% of advisers use subscription-based Social Security tools, and the majority of respondents indicated they are reluctant to pay for support going forward.

While more than nine in 10 advisers discuss Social Security issues with prospective and existing clients, the discussion varies with three key segments: advisers who focus primarily on education and information (26%); those who illustrate different Social Security scenarios but do not recommend a specific approach (30%); and those who recommend specific Social Security claiming strategies (36%). Only 8% of advisers indicated they do not discuss Social Security with clients.

“Social Security is an increasingly important part of the discussions advisers have with clients as they approach and transition to retirement, yet advisers vary considerably in the degree to which they provide assistance on this topic,” said Howard Schneider, president of Practical Perspectives and author of the report.

The most frequently-mentioned tools and software include product providers, general planning tools and third-party sources. The most recognized providers include MoneyGuidePro, BlackRock, the Social Security Administration, Horsesmouth and Social Security Analyzer, according to the report.

The use of software tools and technologies vary by service channel. Wirehouse advisers are least likely to use any software or technology in delivering Social Security support and are least willing to pay a fee. On the flip side, more than three in four at RIAs — 78% — are willing to pay a fee, including 24% who are receptive to paying $500 a year or more. Independent advisers are also more willing to pay a fee for Social Security tools, with nearly two-thirds of them indicating they would do so.

Not surprisingly, advisers who are more engaged with Social Security support have a greater willingness to pay for a tool or software. More than 60% of advisers who provide clients with various Social Security scenarios or who recommend specific claiming strategies are willing to pay a fee, compared to less than half of advisers who focus mainly on education.

However, support is not limited to software and online tools. Nearly half of advisers who participated in the survey said they attended a presentation on Social Security at an off-site conference or meeting. And at least one in three said they accessed other types of support in the past year including webinars, a wholesaler presentation or a conference call.

The majority of advisers — 62% — say clients are highly receptive to discussions regarding Social Security. This suggests there is a great opportunity for advisers to talk about Social Security with clients.

Most advisers perceive the delivery of Social Security support as a means of deepening relationships with existing clients. Few find it has any impact on attracting new clients. However, advisers who tailor financial plans and recommend specific Social Security claiming strategies are more likely to perceive it as an effective way to generate new prospects.

“There is a large investment being made by providers, distributors and service firms in delivering tools and training on Social Security, so it is important to have insight on how advisers actually use these solutions,” Mr. Schneider said. “Satisfaction with support from key sources, especially asset managers and insurance companies, is generally modest at best, suggesting significant opportunities for these firms to enhance what is available to advisers.”

(Questions about Social Security? Find the answers in my new e-book available at


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