When my son was about 2, we lived in a New York City apartment near an awesome Italian family restaurant. He loved calamari over linguine. One day, another much older patron asked him how he liked his “squid.” “It’s calamari,” replied the confident tot. “Yeah, calamari is squid,” pressed the other diner. “Well,” my son explained (dismissively), “I like it anyway.”

A historic generation of 76 million people with a median age of 66 are rolling out of the workforce at 12,000 per day (a number that’s inevitably climbing). They need to replace paychecks from work and secure their healthcare. And survive their longevity. Sounds like a job for an annuity with a cost-of-living adjustment and a long-term-care rider, or something very similar.

You mean a squid?

When I first earned my Series 7 license, I was a stock analyst. But at that ancient time, the Dow was 800 (just two zeroes) and investors were gun-shy, preferring to invest in 9% munis and 15% T-bills (when inflation was 13%). And why not?

As you know, their preferences changed, but not overnight. Both bonds and stocks began an epic climb together, and an entire generation feasted on the returns from funds and managed accounts—initially opposed by a legion of stockbrokers who scoffed at the transparency and “risk-adjusted returns.”

Not so fast-forward to today, when commissions are free and managed assets are $40 trillion.

Those same clients are now facing the expenses of retirement. So far this year through May 6, the Dow fell 9.5%, Apple dropped 11.4% and the Nasdaq crumbled 22.4%. Retirees who remember losing half their account values from 2007 to 2009 (not to mention the first tech wreck 20 years ago) are justifiably concerned.

In a recent Financial Advisor flash poll of advisors, FA asked what advisors would do if clients said they wanted to take less risk. Eighty-five percent opted to “change asset allocation” instead of turning to income strategies and annuities. One way to look at it is that they are defending capital market theory as an intellectual response to an emotional condition. But it’s getting well-intended advisors in trouble with clients who think they are being ignored—or dismissed.

“Retirement planning is like building a family dinner with multiple, complementary ingredients,” says a well-respected executive at a national advisory firm. There’s a reason giant mutual fund and ETF complexes are eager to add annuities and income solutions to defined contribution platforms. Having just one dish—even with underlying components like a managed portfolio—should not be expected to satisfy everyone. The menu makes sense of it all.

That’s a terrific perspective for both advisors and clients. There is complexity—inherent complexity—in building solutions to fund a 30-year retirement. The portfolio can be the entrée, but what about the side dishes, the salad, the appetizers, the dessert, the wine?

To some people, the wine is the highlight. But too much might ruin the meal (and the next day). And anyone with a big family can tell you that it is important to recognize that every member has different preferences.

Watching advisors and their clients wrestle with the myriad needs of retirement, we see their frustration at the lack of certainty. And we see their anxiety. Most of the success factors, like longevity, are unknown. But we cannot and should not allow the unknown to stoke unease. There are other things important to clients: such as peace of mind, comfort and confidence. And these are things they are willing to pay for.

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