Over 59% of retirement advisors report that clients are more concerned about their retirement prospects than they were just a month ago, according to a new survey from The American College of Financial Services.
Market volatility and skyrocketing unemployment in the face of the COVID-19 pandemic during the past month has left many Americans experiencing high levels of anxiety about their financial security—including the viability of their current retirement planning strategies.
After polling retirement advisors in early March to gain understanding about how their clients were reacting to the early stages of the crisis, a follow-up survey was conducted to determine how client sentiment has changed in the past month.
In addition to 6 in 10 advisors saying clients are “more concerned” now than they were a month ago, the survey also found nearly 93% of advisors say their clients have already reached out to them with concerns about their retirement plans due to the escalating impact of the COVID-19 pandemic and resulting market volatility. That’s a big increase compared to 66% in early March.
“Our findings show a real and marked increase in anxiety, which is certainly understandable given how quickly things have shifted in a month,” says Wade Pfau, Co-Director of the Center for Retirement Income at The American College. “The good news, though, is that we’re also seeing advisors and clients alike increasing their communication with each other to respond to these concerns, which is the key ingredient to successful financial planning.”
Additional findings of note include:
- Consumers are adjusting their retirement plans: 68% of advisors reported having clients that have made changes to their retirement plans due to the escalating impact of the COVID-19 pandemic and resulting market volatility, compared to only 36% one month ago.
- Younger savers are increasingly concerned: When asked what group best represents the majority of those reaching out with concerns, advisors noted an uptick among clients approaching, but not quite near, retirement age.
- CARES Act spurs increased advisor-client communication: 83% of advisors said they were reaching out to their clients about the CARES Act, and 60% of advisors said they had clients reach out to them for explanation or support regarding the CARES Act.
“This survey just reiterates the ever-increasing concern of retirees and the importance of having a retirement income plan in place before the crisis begins,” said Colin Slabach, Assistant Director of the Center for Retirement Income at The American College. “It’s something that consumers in all stages of retirement planning need to be aware of so that they can make adjustments to their investment strategies and even lifestyles in an attempt to recover from these losses.”
More evidence of advisor communication demand spike
According to new research from AdvisorStream, investor demand for advisor communication jumped 47% in March from February, underscoring the desire for closer advisor-client contact as the COVID-19 pandemic began rolling through the global markets.
“Investors want facts, not fear,” says AdvisorStream CEO and Co-Founder Kevin Mulhern. AdvisorStream’s findings reveals that clients want consistent and frequent personalized contact with their advisors in times of crisis, primarily by email, which answers the current and near-future inability to meet in person, and the significant time it takes to phone clients at a high frequency.
“The volume of electronic communication between advisors and investors during March is unprecedented across the AdvisorStream platform in the U.S., U.K. and Canada,” Mulhern says.
In March, AdvisorStream says it digitally delivered nearly 4 million compliant investor communication campaigns, up by more than 500,000 from February. The spike in demand is attributed in major part to growing fears of the pandemic’s impact on retirement plans, and the increasing anxiety that continues to ripple through the economy.
“With the increasing daily uncertainty, advisors are stepping up to the plate more boldly than ever to clarify, illuminate and lead the conversation,” Mulhern says.
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
