Each forum included 200 invited guests — older Americans, family and professional caregivers, aging experts and others. These discussions took place across the country.
Reading about the subjects they discussed and the conclusions reached in the conference Final Report was not a surprise to us at AgingInvestor.com, as we are in the field. But one thing did surprise me completely: no one gave much mention to the need for thorough financial education and planning with professional help.
There was mention of the Department of Labor’s initiative to facilitate State creation of retirement savings programs. There was also discussion of the U.S. Department of the Treasury’s recently issued guidance clarifying that employers sponsoring defined benefit pension plans generally may not offer lump sum payments to retirees to replace their regular monthly pensions. As noted in a recent Government Accountability Office report, such lump sum payments transfer longevity risk and investment risk from employers to individual retirees, putting retirees at risk of being unable to maintain their standard of living or outliving their assets in retirement. Wouldn’t financial advice help? No mention was made of the value of at least seeking advice from financial professionals to maintain income while investing responsibly for those who did get a lump sum payment.
The report emphasizes the need for providing lifetime income and seems to favor employers offering annuities as part of retirement planning. The Treasury and Labor Departments previously have issued a series of guidance documents encouraging plan sponsors to offer responsible annuity options to help protect retirees from outliving their savings.
The Gap
That may work for some, but I found myself at a loss as to why mention was not made of the importance of professional guidance in financial planning, which may be the best way to ensure that an individual does not, in fact outlive his savings. That’s your job.
Opportunity for Financial Advisors
An obvious opportunity for financial advisors is to offer financial education to members of the public. Some attendees will not have enough to make new investments, but others will. With 10,000 people turning 65 every day and the oldest boomers turning 70 now, financial advisors can play a key role in helping aging members of society do better with managing their money as they age. Advisors can improve the sometimes negative public perception of the industry by stepping up, putting on few seminars with the basics of saving and investing and capturing some new clients in the process.
You will also have a chance at any seminar you offer to give some tips on elder financial abuse.