What You Think and What Retirement Clients Want Are Different

What You Need to Know

Aging people have different reasons for investing.
Most financial professionals say the talk about emotions and goals with their clients.
Clients are much less likely to say they have discussed emotions and goals with their financial professionals.

As people grow older, they naturally contemplate what matters most to them. In particular, they aim to live a life that is meaningful and makes a positive contribution to the world.

Wealthy or not, this universal ambition is grounded in the truth that our lives are fundamentally worth living and that each of us matters.

Every aging person sooner or later faces certain questions. A normal part of growing older is to ask the “why?” question. Why am I investing? What truly matters? What do I want to do with my next chapter in life?

Financial professionals should be starting every client conversation discussing such issues as a means of clarifying their overall investment objectives.

Unfortunately, many don’t.

Life issues are long-term goals and aspirations ranging from bucket list experiences to simply a financially secure retirement, as well as the emotionally unsettling speed bumps investors inevitably encounter on the road to achieving their goals.

However, according to two parallel nationwide surveys of both financial professionals and investors, conducted by the Alliance for Lifetime Income, financial professionals significantly overstate their performance on this all-important metric.

The survey shows big gaps between what financial professionals think their clients want and what clients really want and concludes that they are consistently falling short of their clients’ expectations when it comes to discussing an array of life issues with them.

1. Bucket List Goal.

Whether it’s witnessing the Northern Lights or attending an Elton John concert at Madison Square Garden, bucket list experiences are a major reason why people invest.

Nearly two-thirds (63%) of financial professionals say they have discussed such goals with clients, but investors disagree; only 37% of investors say their financial professionals have mentioned bucket list goals in retirement planning conversations.

2. Life in Retirement

Americans are characteristically optimistic about the opportunities awaiting them in retirement. However, only 35% of investors say their financial professional has asked how they envision spending a typical day in retirement, whereas 55% of financial professionals contend they have done so.

3. Emotions

Investors who are approaching or have entered retirement inevitably experience a variety of life-changing events — be it a downturn in the stock market or the birth of a grandchild — that can affect their emotions and health, and therefore, their financial outlook.

Sixty-four percent of financial professionals say that they have discussed the emotions their clients experience as they anticipate or enter retirement, but only 23% of investors agree.

Moreover, roughly half (48%) of investors worry about their finances at least several times a month, but only 8% of financial professionals believe their clients worry that much.

4. Unexpected Retirement

Nearly half of retirees (47%) report that they retired earlier than they expected to, according to a 2022 Employee Benefit Research Institute survey.