10 retirement risks facing your clients
Allocation risk
An overly conservative asset allocation may cause retirees to run out of money prematurely, while being too aggressive increases their exposure to market volatility.
“Too often, asset allocation is based on a static number or single risk score. When markets go down, the human tendency is to want to lower those numbers. But when markets recover, clients underperform and then change advisers, who then raise the client’s risk score closer to market highs. An alternative approach is to use a risk range that the adviser can operate within and adjust the allocation appropriately.”
— Gregory Luken, president and founder, Luken Investment Analytics