Retirement income planning is the most popular service consumers seek from a financial advisor, and it’s also the top subject RIAs want to learn more about in order to serve the growing retiree market.
These are among the key findings in new research released today by The American College of Financial Services, indicating that independent financial advisors and consumers are aligned on the need for specialized services, especially those focused on retirement income planning.
According to consumers, it is the most popular service they seek from a financial advisor, and seven in 10 (71.2%) independent advisors desire to advance their specialized knowledge in the many complexities facing the growing retiree market. This alignment speaks to a need not yet met, which is not altogether surprising given the limited coverage of retirement income planning in comprehensive financial planning education.
Beefing up their knowledge of retirement income planning was emphasized by advisors over some related issues facing a similar clientele like estate planning and advanced tax planning, and topics such as investment and wealth management.
The data is from The American College’s 2022 RIA Growth and Specialized Knowledge Survey comprised of nearly 400 independent or hybrid advisors at Registered Investment Advisor (RIA) firms and the Granum Center for Financial Security’s 2022 Consumer Survey made up of over 1,150 consumers.
“We see a clear need for further education and specialized knowledge in retirement income planning—it is what consumers want, and it is what advisors in the RIA community think is valuable.”
Michael Finke
The research substantiates consumers are overwhelmingly seeking guidance with retirement planning more than any other area.
“Looking at the data, we see a clear need for further education and specialized knowledge in retirement income planning—it is what consumers want, and it is what advisors in the RIA community think is valuable,” said Michael Finke, PhD, CFP, professor of Wealth Management and director for the O. Alfred Granum Center for Financial Security at The American College of Financial Services.
A significant advantage of specialized planning education is that it helps independent advisors position themselves to cater to the unique needs of their clients and deal with more complex cases one is likely to encounter with high-net-worth clients.
Specialized planning creates better results for clients by helping to ensure all components of their financial lives work together. Additional comprehensive benefits of specialized knowledge for emerging RIAs include easier recruiting, faster growth, greater sustainability, diverse fee structure options, and the ability to take on more lucrative clients. It also allows for businesses to be less susceptible to challenging market conditions because clients will always need specialized fee-for-service guidance.
The case for designations
The 2022 RIA Growth and Specialized Knowledge Survey provided plenty of support for the value of industry education through the pursuit of financial services professional designations. Among the findings:
- Nearly three in five (58.5%) independent advisors at RIAs strongly agree that increased knowledge obtained by pursuing a financial services designation has helped advance their career.
- Professional designations programs (66.6%) are among the most-preferred education formats for applied specialized knowledge.
- Nearly eight in 10 (79.4%) independent advisors surveyed agree they would not have been prepared to provide integrated services without the increased knowledge obtained through pursuing a financial services designation.
“Compared to short-form training such as micro-credentialling and premium continuing education modules, more than twice as many independent advisors listed professional designations as a preferred education format,” Finke added. “The demand for advanced education through a professional designation among advisors aligns with the strong consumer preference for ‘evidence of knowledge or certifications’ when seeking the services of a professional advisor.”
What consumers want from advisors
According to findings from the 2022 Consumer Survey, three out of 10 consumers (31.3%) chose “understanding how much I can safely spend in retirement” as the No. 1 service they seek from a financial advisor.
Retirement income planning was the most popular desired service among older and younger consumers alike, and was equally popular among men and women.
SEE ALSO:
• Finke Explores Potential of Portfolio Income Insurance in New Whitepaper
• Wade Pfau to Head RICP Designation at The American College