Longer client lifespans a top trend for independent advisors

September 19, 2019 by Tyler Martyniak

about the author:

Tyler Martyniak

Account executive

Tyler Martyniak is an account executive at Advicent, the financial planning technology provider of choice for nearly 100,000 financial professionals.

When independent advisors were asked about what the largest impact would be on their practices moving forward, many had an interesting answer: client longevity. This and several other trends highlighted a 2019 study from Charles Schwab that focused on independent advisors.

Here is a deeper look at what areas advisors say will be impacted with longer client lifespans and tips on how advisors can prepare their practices for this trend moving forward.

Planning for longer client lifespans

Of those surveyed, 44 percent say client longevity will have a significant impact on their firm in the future. Advisors specify that planning goals, the timing of retirement, and spending during retirement will be the areas that clients will feel the impact of extended lifespans the most. For advisors, this presents a new set of financial challenges as mitigating risk throughout retirement (asset allocation) and ensuring there is enough capital to last the full duration of a retiree’s extended life are top priorities.

Mitigating risk

This challenge is somewhat of a tight rope for advisors. A more conservative portfolio may not net enough return to guarantee the same standard of living from the start of retirement to the end, while an aggressive portfolio may burden the client with too much risk.

With the ability to create multiple in-depth scenarios, NaviPlan can help advisors balance potential investment risk their clients are exposed to. This allows the advisor to weigh a range of different investment portfolios and find one that meets both the risk profile and retirement needs of their clients.

Lasting retirement funds

To combat extended periods of retirement that may present shortfalls in funding down the road, monitoring cash flows throughout retirement gains increased importance. Whereas a goals-based financial plan may not be able to accurately account for the changes that can occur following retirement, a plan that leverages a long-term cash flow analysis strategy can stand the test of time. Learn more why a plan leveraging only the goals-based methodology can fall short in our whitepaper below:

Why taking shortcuts in financial planning can be detrimental to advice quality

Learn more



Further, with longer retirement periods, advisors are reminded that financial planning is less about predicting the future, but rather being prepared for its unpredictability. NaviPlan is equipped to handle the ever-evolving needs of clients throughout these extended client-advisor relationships with a modular approach – allowing advisors to meet an individual’s changing needs as they progress forward towards and during retirement.

To learn more on why relying too heavily on a simpler goals-based planning method can be detrimental to advice quality, click here >

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