Retirement planning is no longer what it used to be as COVID-19, geopolitics, and economic volatilities continue to disrupt livelihoods around the world. Post-pandemic investor attitudes and markets are clearly set to pose new challenges for wealth managers and advisors.
New research from MMI and Aon in the first report of their 2022 Advisory Solutions: Expectations and Experiences series looks at emerging retiring planning gaps. Based on investor and advisor surveys conducted in March 2022, the report identifies the ways in which investors are navigating today’s circumstances to achieve their retirement goals – and provides action steps for wealth management firms and advisors seeking to deliver a more impactful service that effectively addresses clients’ post-pandemic needs.
Among the study’s key findings:
- One in five investors – largely driven by 45% of younger (under-35) investors – expect to retire earlier than planned before the pandemic. In fact, 65% of under 35-year-olds expressed a desire to retire by the age of 55 and a further 21% by the age of 62.
- Many of these investors benefited financially during the pandemic. 24% of investors stated that they had increased their expected retirement budgets – a number that rises to 54% among investors under 35 years old and 47% for crypto investors.
- Despite lofty aspirations, less than half (43%) of investors are very confident of achieving their retirement goals. Younger male investors are the most optimistic of those surveyed, while only 23% of the sandwich generation of 45 to 54-year-old investors are very confident about achieving their retirement goals.
- Overall, investors expressed a generally high level of satisfaction with their financial planning experience. 60% of investors indicated that they were very satisfied. However, satisfaction drops to 52% among 35 to 44-year-olds and to 46% among 45 to 54-year-olds. These two age groups also rated their advisors lower on developing an understanding of their personal goals and values as part of the planning process.
- There is a gap between investors’ interest in guaranteed income and the solutions offered by advisors. Younger investors are more interested in guaranteed income solutions than their older peers, with 39% being very willing to give up returns for certainty as compared to their older counterparts (18%). On the other hand, 32% of advisors feel that annuities are too expensive to be a good source of retirement income compared to fixed-income and dividend portfolios.
Detailed findings from the 2022 Expectations and Experiences research are being released in a series of three reports. The next two reports will focus on gaps in Investor and Advisor Digital Experience and Attitudes Toward Cryptocurrencies and Cybersecurity.
To learn more:
Register for a members-only MMI Webinar with Peter Keuls of Aon on Thursday, August 11 at 2 PM ET.