Dissecting Client-Advisor Discussions

IRI Research: Investors Relying on Advisors, Heeding Recommendations

WASHINGTON, D.C. – The Insured Retirement Institute (IRI) today released new research findings that show investors are turning to financial advisors for retirement planning help. The survey provides a snapshot of these retirement planning conversations, with many discussions focusing on determining and meeting retirement savings goals. The survey also found that a majority of investors lack extensive knowledge on a myriad of investment products including stocks, bonds, and target-date funds.

“When we measured understanding of various financial products, not once did a majority of investors indicate that they had comprehensive knowledge about the product in question,” IRI President and CEO Cathy Weatherford said. “Perhaps due to this knowledge gap, we found nearly two-thirds of respondents said they invest through a broker or financial planner. Furthermore, these investors place a great deal of importance on the advice they receive from their advisors, with three in 10 saying that their advisor’s recommendation is the top reason for selecting an investment. These findings demonstrate the value of financial advice and the overall impact advice has on retirement readiness in America.”

Preliminary survey results were presented during the IRI Marketing Summit 2014 in New York. The IRI findings are based on a survey of 800 investors with at least $25,000 in investable assets. Responses were collected in February 2014.

Key findings from the survey:

  • Areas for consultation: For those investors who have consulted with a financial professional, the most common areas of discussion were retirement planning (88 percent) and investing (84 percent). Other issues include: taxes (40 percent), estate planning (38 percent), and insurance coverage (37 percent).
  • Advisor communications: Personal interactions, such as in-person meetings and telephone calls, are not only the most common forms of communication, but they also lead to the highest levels of client satisfaction. 87 percent of investors are satisfied with in-person meetings and 80 percent are satisfied with telephone conversations.
  • Retirement planning conversations: When it comes to planning for retirement, most investors, 83 percent, said their advisors have discussed the level of savings needed, and 80 percent said their advisor discussed their retirement age. To a lesser extent, advisors are discussing retirement lifestyle issues such as housing and relocation (66 percent), long-term care needs (57 percent), and Social Security claiming strategies (41 percent).
  • Tax deferral: When selecting a retirement investment product, 89 percent of investors said tax deferral is an important feature, with 35 percent indicating that it is “very important.”
  • Reasons for not consulting an advisor: Contrary to popular belief, cost and trust do not appear to be major impediments to working with a financial professional. The top reason, as indicated by 71 percent of go-it-alone investors, is that they prefer to do it themselves or they receive financial counsel from a spouse or relative. Only 21 percent said cost was an issue, and even fewer, 16 percent, cited trust as a factor.

Complete research results will be released in May during the Investment News Retirement Income Summit.



About the Insured Retirement Institute
The Insured Retirement Institute (IRI) is the leading association for the retirement income industry. IRI proudly leads a national consumer coalition of more than 20 organizations, and is the only association that represents the entire supply chain of insured retirement strategies. IRI members are the major insurers, asset managers, broker-dealers/distributors, and 150,000 financial professionals. As a not-for-profit organization, IRI provides an objective forum for communication and education, and advocates for the sustainable retirement solutions Americans need to help achieve a secure and dignified retirement. Learn more at www.irionline.org.