The first problem that financial advisors need to address with clients approaching retirement isn't risk tolerance; it's finding investments that can match their liabilities, or living expenses.

This vexing problem isn't just confronting independent financial advisors working with individual clients. It is rapidly challenging pension managers around the globe.

The upshot is that we are about to enter a new era of solution-based investing that focuses on satisfying retirement liabilities. Too many individuals and institutions are staring retirement shortfalls in the face to worry about competing for relative returns.

That was the topic of conversation at an Absolute Return Symposium sponsored by Putnam Investments in New York City on November 8. As the leading purveyor of absolute return (AR) funds in the mutual fund space, Putnam has a direct interest in promoting the concept, which was conceived in the institutional and hedge world several decades ago. Today, many other fund complexes are registering or contemplating the launch of AR funds.

Complicating the challenge is that the global financial markets are entering an era where "we still don't know where we are going," according to Cynthia Steer, managing director and head of beta research at Rogerscasey. A consultant to large institutions, Steer told attendees that she needs "a wider toolkit to help" her clients pay the bills and meet their obligations. "Style boxes is not where the world is going to be," she said.

Steer wondered if the global economy wasn't entering a period like the 1918-1923 era when the United States became the de facto backstop for the gold standard as European economies reeled from the aftermath of World War I debts. We just don't know "which currencies will survive as fiat currencies and which ones" will have to become gold-based.

"Corporate credits could trade through sovereign credits," she said. Steer also wondered if we could see a period reminiscent of the 1930s when "flight capital" played a big role in the financial markets. "You are going to have to [take] clients places where they won't be very comfortable," she said. "You'll need strategies that go back and forth more easily."

Jeffrey Knight,managing director and head of global asset allocation who oversees AR funds at Putnam, remarked that expected return assumptions ten years ago were simply unrealistic and advisors need to reconsider how they construct portfolios.

Obvious answers may not prove to be panaceas. TIPS have performed so well that they "could backfire as an inflation hedge" for folks who purchase them today.