Financial Planners Say Retirement Income Market Will Grow Slowly

The 2006 FPA Financial Advisors' Attitudes and Perceptions survey about the Retirement Income Distribution Market, sponsored by OppenheimerFunds Inc. and produced by the Diversified Services Group, Inc. (DSG), indicates that the majority of financial planners believe that the retirement income market will grow substantially, but at a slow pace.

"Regardless of the pace of growth, retirement continues to evolve into a more and more complex financial planning issue," said Kathleen Beichert, Senior Vice President of Retirement Plans at OppenheimerFunds, Inc.

Key findings of the study:

• Systematic withdrawal strategies and dividend-paying investments are by far the most commonly recommended retirement income solutions.


• Specific income-generating products such as annuities and Certificates of Deposits (CDs) are recommended far less frequently.


• 60 percent of the planners surveyed have recommended reverse mortgage products at some point, however, only 6 percent recommend them often.


• 75 percent of those surveyed use some type of retirement income planning software program. Two-thirds of these programs are modified accumulation programs or were designed by the planners themselves.


• Respondents typically rely on existing clients to fuel their retirement income business. It appears that this group waits for their clients to reach retirement age and/or leverages their existing relationships for referrals.

"While existing clients and referrals are always a good way to target this market, there is a real opportunity for planners to reach out toothers who need help with retirement planning," said Beichert. "Planners should look for ways to partner with financial services companies and expand their retirement income client base."

The study also contains implications for providers of products and services to financial planners. "Financial services companies, financial planners, and technology vendors must develop more sophisticated planning tools that segment clients and provide them with credible, justifiable, tailored solution sets that are simple in concept, but adaptable to a variety of financial needs during the early and late retirement life stages," added Vickery.

About the Financial Planning Association: The Financial Planning Association(R) (FPA(R)) connects those who need, support and deliver financial planning. We believe that everyone is entitled to objective advice from a competent, ethical financial planner to make smart financial decisions. FPA members demonstrate and support a professional commitment to education and a client-centered financial planning process. For more information on FPA, visit http://www.fpanet.org.

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