For those of us in the financial services business, we know that retirement planning is critical not just for individuals but for all of society.
Lack of retirement security presents a risk not only to individuals and families who may face financial hardship, but to society as a whole. As our population ages worldwide, this issue only continues to increase in importance.
Retirement and longevity is such a big issue that international leaders discussed it at this year’s World Economic Forum’s Annual Meeting in Davos, Switzerland. The World Economic Forum also published a new report to establish a foundation for a financially resilient future.
The idea is to raise the profile of the longevity discussion, promote alignment across sectors in addressing the demographic and financial challenges of global aging and support individuals to be resilient in their longer lives. More than 35 organizations, including our parent company Allianz, have committed support for the Davos Longevity Economy Principles.
As a financial professional, you play a critical role in helping your clients seek retirement security. Your role helping your client’s secure their financial future has never been more important than it is now.
What’s worrisome is that fewer Americans said they are working with a financial professional than last year. Only 44% of Americans said they currently work with a financial professional in the Annual Retirement Study from Allianz Life Insurance Company of North America. (Allianz Life conducted the online survey in February and March 2023 with a nationally representative sample of 1,000 individuals age 25+ in the contiguous U.S. with an annual household income of $50k+ (single) / $75k+ (married/partnered) OR investable assets of $150k.) That’s down from 48% last year and 49% in 2021.
At the same time, Americans need to navigate a new retirement reality with inflation, market volatility, longevity and other factors posing a risk to their retirement. Still, too many are not taking the steps necessary to set themselves up for a successful financial future. Two in five Americans (40%) said they don’t have a financial plan for retirement and will just figure it out when they get there. And more than half (56%) don’t know where to start planning beyond having a basic retirement account like a 401(k) or IRA.
The good news is that Americans know that a financial professional can help them work toward their goals. In fact, the overwhelming majority of Americans (88%) said working with a financial professional would be helpful to ensure they can financially support the things they want to do in life. So, there’s never been a better time to grow your practice with additional clients.
With people living in retirement longer, the value of working with a financial professional is even greater for your clients who need to prepare to fund more years after leaving the workforce. The challenge is to move Americans from knowing that a financial professional can help them to working with one.
Few can have as much of an impact in addressing longevity in retirement strategy as financial professionals. The role of a financial professional goes well beyond selling financial products. Successful financial professionals act as a trusted partner for their clients to help them attain their retirement goals.
The problem of underfunded retirements is worldwide. But, one client at a time, financial professionals can make a difference.
Eric Thomes is chief distribution officer at Allianz Life Insurance Company of North America.