Dealer groups are deciding whether or not to continue to service clients entering the retirement phase as they acknowledge the significant number of retiring baby boomers, according to an industry executive.
“There are pockets that are moving in recognition of the need,” Equity Trustees head of wealth management Phil Galagher told InvestorDaily.
“Dealer groups are sorting themselves out and those that have been heavily reliant on the baby boomers and see that generation starting to drift will need to work out whether they are going to refocus on younger generations or regain the relationships with clients.”
Overwhelmingly, baby boomers could see the financial structures needed in retirement were vastly different to the structures dealer groups had been putting together for retirement planning, Galagher said.
“It is becoming increasingly apparent to the planning community that retirement is actually quite a milestone and triggers the need for all sorts of services and advice,” he said.
“Dealer groups are starting to see a greater need to be able to manage estate planning, but the real issue they face at present is that they’re going to have to demonstrate and acknowledge a particular skill base to be able to do that properly.”
He said the degree of skill and knowledge required was not something dealer groups could replicate overnight as there were limited opportunities to acquire the necessary expertise.
In response to concerns over lost revenue opportunities, he said baby boomers had been the mainstay of the revenue stream for most dealer groups.
“For some considerable period of time now, planners have done very well out of the baby boomer generation, now suddenly the leading edge of that group is entering retirement and dealer groups need to either adjust to continue to provide needed services to that group or see them disappear as a revenue opportunity,” he said.
“[The risk of losing revenue might be a concern] but the opportunity to hang onto them is as strong as the risk of losing them, in terms of where the dealer group’s focus is.”
Another significant issue emerging in the space was whether or not there are enough products available in the retiree sector.
Annuities were the first that came to mind, but there were a variety of vehicles available to achieve an effective plan, Galagher said.
“Even if there were only three or four [solutions], it’s not about is there enough, it’s more about do people know about them and do the providers promote them,” he said.
“It is certainly an opportunity, but it’s not one to be taken on lightly. Advisers need to have researched it thoroughly before they attempt to get involved.”
