Trade group to urge risk-based approach

The Boston-based Retirement Income Industry Association today gave a sneak peek into an initiative designed to encourage financial advisers to take a risk management approach when recommending retirement products. The new process was unveiled during a panel, “Frameworks for Risk Management Techniques,” at the Managing Retirement Income Conference in Boston. Though the accumulation-based mind-set might make sense prior to retirement, advisers need to adjust their strategies when clients become retirees. It’s erroneous to think about the retirement income phase as merely spending their assets, noted Mike Zwecher, co-chair of RIIA’s peer review selection committee, at the panel. Rather, advisers should view retirement planning as building a floor for income, using insurance and other products, he said. This new process outlines fives steps for advisers to follow when preparing clients for retirement income, noted Elvin D. Turner, managing director of Turner Consulting LLC in Bloomfield, Conn., and co-chairman of RIIA’s research committee: * Understand the client’s balance sheet and financial situation in terms of assets, inflows and outflows. * Create a life cycle profile of the client’s financial situations and dreams. * Draft a retirement risk profile, comparing the client’s situation and wishes to the list of risks. * Identify clients’ insurance products, savings accounts, stocks and other products. * Select and implement the products to address the needs.