Clients Fond Of Written Retirement Plans, Survey Says

Advisors' hearts may be willing, but their writing hand is weak when it comes to putting a solid retirement plan down in ink, according to a new survey.

According to Boston-based Fidelity Investments' new report issued today entitled "Fidelity Retirement Refined," retirees are generally more satisfied with advisors who provide them with retirement income planning in detailed, written form. The survey also indicated that advisors who use written plans also yield more referrals and client assets.

The survey polled over 500 financial advisors and 500 pre-retirees and retirees who work with a financial advisor.

But while Fidelity's survey says that eight out of ten pre-retirees think a detailed retirement plan is important, only 18 percent of those who work with an advisor have a retirement income plan and, among those, only 53 percent actually have a written plan.

"Our survey found that advisors face a range of challenges that can make writing a retirement income plan feel extremely complex-and for that reason, many advisors are opting for more informal planning processes," said Larry Sinsimer, senior vice president, practice management, for Fidelity Investments Institutional Services Company. "Yet, investors are telling us that those advisors who can help them address the complexities of retirement planning in writing will secure their loyalty, referrals and business."

With nearly 3 million baby boomers turning 65 this year, Fidelity's "Retirement Redefined" survey also developed several financial insights that may help financial advisors assess how to make their retirement income planning processes more effective, and potentially more profitable.

Advisors offered several reasons for not using written plans, according to the survey. Among the reasons cited were difficulty in getting clients to focus on the future and the fact that in today's economic environment, plans may quickly become obsolete.

Yet the survey pointed to a number of reasons how written plans may help:

* Investors who had written retirement income plans reported the highest levels of satisfaction with their advisors. Sixty-three percent of pre-retirees who reported having written, detailed retirement income plans said they were "very satisfied" with their advisors; that percentage grew to 69 percent among retirees.

* Investors who reported being "very satisfied" with how their advisor is handling their retirement income plans consolidated more assets with them. "Very satisfied" pre-retirees consolidated 72 percent of their savings and investments with their primary advisor and "very satisfied" retirees consolidated 81 percent of their assets.

* Seventy-nine percent of pre-retirees and 83 percent of retirees who reported being "very satisfied" with how their advisor developed their retirement income plans have referred business to them.