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Put It in Writing: Building Trust Between Client and Advisor

Despite what the future may hold for advisors under the Department of Labor (DOL) fiduciary rule, advisors are still finding ways to provide reliable service and planning for retirees and pre-retirees. However, managing the implications of the new fiduciary rule will still be troublesome. Advisors in the retirement industry will need to prove that they put their clients’ best interests first when providing retirement savings and investment advice.


This could lead to more advisors leaving the business, particularly those who are older and less willing to adapt their practices. For those who elect to stay in business, there is an opportunity to demonstrate that their advice supports their clients’ financial goals without fear of DOL fiduciary rule implications. A LIMRA Secure Retirement Institute study, “Benefits of Retirement Planning,” suggests formal written retirement plans may offer advisors a way to improve retirement outcomes for their clients and can help build stronger, lasting relationships with them.

The study revealed the differences between those who have a formal written plan and those who don’t:

  • Half of clients who have a formal written plan said they feel very prepared for retirement, compared with only 17 percent of those without one.
  • Seventy-eight percent of clients with a formal written plan have developed a specific plan for generating income from savings; only 38 percent of those without a formal written plan have done this planning.
  • These clients are twice as likely to convert a portion of their assets into a guaranteed income product.

Financial risk factors — including rising health care costs, potential inflation and market instability — can wreak havoc on hard-earned retirement savings. The process of developing a formal written plan usually addresses these concerns. The plan helps empower retirees and pre-retirees and encourage them to approach their advisor with questions, and it gives them the confidence to consider themselves financially successful.

Clients have more favorable opinions of financial planners who create written financial plans. Research has shown this leads to increased client satisfaction and loyalty. Clients see their advisors as more accessible, as having a better understanding of their clients’ long-term needs and as more likely to put their clients’ interests first. Yet our research shows that only one in seven advisors currently offers written retirement planning to all of their clients.

We have learned that developing formal written retirement plans offers tremendous value to both clients and advisors. Nearly two-thirds of clients whose advisor created a formal plan said they are comfortable referring their advisor to their friends and family. At a time when it’s critical for advisors to show their recommendations are in clients’ best interests, they must provide evidence that they have well-thought-out and documented plans. In today’s DOL world, this is an excellent achievement.

Alison Salka is responsible for directing LIMRA’s retirement research program. She supervises and conducts consumer research, benchmark studies and white papers focused on helping member companies better understand issues and trends in the retirement market. Contact her at [email protected].

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