More focus on post-retirement planning needed

Guiding clients to retirement is only the beginning: Advisers’ real work is to help retirees through their non-working years. That was the message independent consultant and managed-accounts industry veteran Leonard Reinhart drove home at the Investment Management Consultants Association’s annual conference in Orlando, Fla. “We’re basically back to running defined-benefit plans for individuals, and we cannot afford to make mistakes,” he said, adding that the challenge is compounded by the fact that the expectations of baby boomers are way out of whack. “As an industry we haven’t spent a lot of time on retirement,” he said. “But when a client is retired, all their assets are retirement assets, and helping a client take out $10,000 a month is not easy to manage.” With so many financial professionals competing for baby boomers, who represent 25% of the U.S. population but control 75% of the liquid assets, Mr. Reinhart said the advantage goes to the adviser acting as a fiduciary. “This is a huge opportunity, because advice is going to become more valuable,” he said. “We know the boomers are underfunding their retirement, and they claim they will work longer, but in actuality they’re retiring earlier.” Mr. Reinhart pointed out that as boomers age, they tend to consolidate advisers and custodians. “For those who can accept change and adapt quickly, this is a tremendous time of opportunity in the advisory market,” he said. “Position your team as a boomer retirement plan manager.” Along those lines, he added, advisers need to think of a 30-year retirement plan as the product. “The insurance industry is going to start to partner with the managed-accounts industry, and you’ll start seeing guaranteed-living-income streams on top of unified managed accounts,” he said. “There’s a wave of no-load immediate annuities coming out, and everybody in the room needs to become an expert on immediate annuities.”