|Rachel F. Elson|
Advisors may say they're comfortable developing retirement income strategies — but none seem to agree on the right way to create an income stream.
That's one of the key findings of the latest Financial Professional Outlook survey from
The survey also suggested there was "no clear consensus on a best practice" for evaluating and measuring success, with answers split between preservation of principal after distribution (34%), a portfolio that maintains a projected rate of return (20%), net present value of projected assets vs. liabilities (15%) and various other options.
"A lot of people are looking for the right solution," says
The combination of demographic shifts — with boomer clients entering retirement — and broader economic trends, including market volatility and the increasingly difficult search for yield, has increased the challenge for advisors, he says.
Because Russell has a background in advising pension funds, Greenshields says, the company has been looking for ways to apply that knowledge to its practice management offerings for advisors. He suggests using the concept of "funded ratios," which compare assets against a client's liabilities — including "spending goals, how long you'll live, the economic environment" and other factors, Greenshields says.
Such ratios are a "laser-sharp communication tool for advisors to use with investors," he adds, saying they also help advisors develop investment plans.
A more positive finding from the survey was a drop in the number of clients with unrealistic retirement income expectations. Advisors reported that 37% of clients were fuzzy on their retirement income prospects — a drop from 46% in
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