First the good news, almost nine out of ten Americans (88%) say that working with a financial advisor would help them reach their financial goals including planning for a comfortable retirement.
The bad news? The reality is that just 44% are doing so according to an annual retirement study by Allianz Life Insurance Co. of North America – and the percentage is down from 48% in 2022.
The challenge for advisors is how to convert aspiration into action and onboard those who want advice on matters such as how to take distributions from retirement savings for their retirement income (78%), and not having enough money to do all the things they want to do in retirement (75%).
The core working age cohort of millennials has seen the steepest drop in use of financial professionals, from 46% in 2022 to 36% in 2023, which is curious given that this group is also most likely to see the value in working with an advisor to ensure their finances support their life goals.
Respondents across generations said that they may not discuss certain topics - including longevity and health care costs - with an advisor if they feel they might try to sell them something (14%), because they did not know their advisor could help them with it (15%), or because they haven’t prioritized finding a solution (23%). Almost one fifth would wait for the professional to raise the topic and a similar share does not meet regularly with an advisor to discuss such matters.
Across all generations, the survey found that a holistic approach to financial advice is required and, crucially, collaboration cannot mean giving up control with 57% of respondents wanting advisors to offer suggestions that the client ultimately decides on. A quarter said that the relationship should feel like a partnership.
“In the past, playing to your strengths in terms of product selection may have been a winning strategy, but financial professionals need to be clear that they are open to collaboration and solutions outside of what they usually offer,” said Kelly LaVigne, vice president of consumer insights at Allianz Life. “It’s about meeting clients where they are, mentally and emotionally, and finding out what keeps them up at night.”
Other key words used in responses include understanding (of values/beliefs and personal concerns) and empathy (towards financial situation and struggles).
“Consumers’ desire for financial advice is as strong as it’s ever been, but financial professionals need to think more broadly about their role," LaVigne concluded. “To successfully serve the next generation of clients, financial professionals need to focus on collaboration, flexibility and truly understanding their clients’ values, priorities and concerns.”
Chicago-based Mesirow Fiduciary Solutions adds flexPATH's plan-level outsourced fiduciary book, boosting its retirement market reach to $164 billion.
Also, Raymond James's employee advisor channel adds breakaways from Wells Fargo and Stifel, while UBS welcomes an ex-Morgan Stanley duo in Indiana.
It promised guaranteed principal and 10% monthly returns. The SEC says it invested nothing.
Ten years after entering the fee-based annuity market, MassMutual Ascend says nearly half its lifetime sales came in the past two years alone – but barriers remain among fee-only advisors.
Amplify, WealthReach, Zeplyn and Zocks have unveiled partnerships aimed at automating portfolio management, content creation, account opening, and client communication.
Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
