An Alliance for Lifetime Income survey released last week revealed a key gap between financial planning professionals and investors when approaching protected retirement income and pensions.
The findings are based on responses from 2,516 consumers to the firm’s 2024 Protected Retirement Income and Planning (PRIP) survey, with 62% of advisors saying they have started a conversation about an annuity product. However, only 27% of investors agree. Similarly, when discussing retirement income planning, 98% of planners say they discuss Social Security, pensions, and annuities, but only 69% of clients agree.
Meanwhile, 96% of advisors say they have discussed when a client should withdraw money from a particular account, but only 66% believe they do. 95% of planners recalled having conversations with clients about tax minimization, but only 64% of clients agreed.
Gene Statler, CEO of the Alliance for Lifetime Income, said in a statement: “We’re not sure what investors need when it comes to retirement planning, and what many financial experts are telling us. There is a clear and worrying gap between them.” “The results from Chapter 3 of our annual survey of consumers and advisors should serve as a wake-up call. Consumer interest and demand for protection is growing, but not everyone nearing retirement. , we need to bridge this communication gap so we can feel prepared and protected for years to come.”
Research by the Alliance for Lifetime Income shows similar disengagement is occurring in conversations about Social Security and employer-sponsored retirement plans like 401(k)s and 403(b)s. While 92% of planners believe their clients helped them decide when to claim Social Security, only 22% of clients say their advisors were most helpful in deciding when to claim. Similarly, 81% of customers find a pension or protected income product in their employer’s plan very or somewhat helpful, but only 68% of financial professionals are aware of this interest .
A recent survey by Invesco cited similar findings among employees and employers, finding that while 78% of plan sponsors said they provided communication and education about retirement income options; It added that 57% of employees did not recall receiving any type of message.
The study goes on to report that lack of engagement can cause a disconnect between both groups. Plan sponsors and third parties may provide materials to employees, but most companies won’t get involved unless it’s aimed at employees.
Amanda Umpierrez is the editor-in-chief of 401(k) Specialist magazine. She is a financial services reporter with over 6 years of experience and has a passion for telling stories and reporting news. Amanda earned a degree in Journalism, Government, and Politics from St. John’s University. She is originally from Queens, New York, but currently lives in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama shows.
