If financial advisors want to be successful, they're going to have to shift more of their focus on retirement income planning to serve the aging baby boom generation, according to a new study.
   The Fidelity Investments report, entitled, "Adapting a Practice for Retirement Income Planning," concludes that advisors will have to become more attuned to issues such as rising health care costs, income management and long-term care in order to effectively serve clients.
   Advisors, however, will find that adopting new retirement income planning strategies is not easy, according to the report.
   "Income planning services are more consultative and complex than asset accumulation services, and as a result, they may also be more time intensive," the report's authors state. "Income planning clients also are likely to generate less revenue for advisors from commissions than accumulation-focused clients."
   Yet the report adds that the rewards for acquiring retirement income planning skills are numerous.
   "The shift toward retirement income planning presents tremendous opportunities for investment professionals to increase client satisfaction, consolidate assets, and generate referrals."
   The survey took information from 813 investors between the ages of 55 and 70-a mix of pre-retiree and retirees-with a minimum of $250,000 in investable assets.
   Among the findings was that health care expenses are the top concern of both pre-retirees and retirees, with 45% saying they were either concerned or very concerned about the issue and its impact on their retirements. The second-highest concern was inflation risk.
   The survey also found that 60% of respondents want to discuss critical illness insurance, long-term care, longevity insurance or reverse mortgages with their advisor. This survey result, in particular, indicates that advisors need to be well versed in health care issues and other risk factors impacting retirement income.
   "Retirement income planning is more comprehensive than the accumulation process," the report's authors state. "It not only requires analyzing clients' expectations and complete financial details; it demands an understanding of the key risks facing retirees, such as rising health care costs."
   Among the report's other findings:
    Fewer than 25% of investors describe their current advisor as having "excellent" knowledge of long-term care and Social Security.
    Nearly half, 46%, of investors say it is "extremely or very" important for their advisors to have detailed knowledge of long-term care planning; and 39% would like to discuss health care coverage with their advisor.
    Among investors who have not built a retirement income plan with an advisor, 85% either don't know how much to withdraw, or may be at risk of drawing down their assets too quickly.   
The majority of investors, 87%, who completed a retirement income plan with an advisor did or would refer someone to them.