Change is the only in life. Greek philosopher Heraclitus coined this phrase but it’s just as true today as it was then. It certainly describes today’s ever-changing retirement landscape: The aging U.S. demographics, lingering questions regarding the long-term viability of Social Security, and the decline of traditional pensions are all changing how individuals think about retirement.

It simply does not mean the same thing today as it did for prior generations. Individuals are shouldering more responsibility than ever before for funding their own retirement and are looking to advisors for guidance.

Advisors can respond to this new normal by shifting their approach to focus on retirement outcomes; that is, secure retirement income.

Shift from a focus on a big balance, to the monthly income people will need when they stop working. Instead of emphasizing that an individual needs to save $1 million for retirement, discuss the retirement income needed and any gap to cover that income.

For instance, to maintain a current standard of living in retirement, an individual likely needs to replace at least 70% of their pre-retirement income. This means for an individual making $100,000 who is on track to have only $50,000 in retirement income, there is a $20,000 gap to meet their goal.

But shifting how an advisor’s practice is structured requires an enhanced skill-set. The following tips can help set you on the right path to preparing clients for retirement.

Be open-minded about change. It’s human nature to resist change and want to stick with the status quo. 

If it’s not broken, why fix it, right? Think about how far the digital world has come. Remember when you had to wait weeks to view pictures taken from your camera while your film processed? This approach was successful and valuable…at that time.

But as technology has evolved over the years, so should your practice. The financial planning process for retirement income must address different risks than simply just saving for retirement. These risks include longevity risk, sequence of returns and market risks, inflation risks and liquidity risks (for emergency needs).  When individuals are living off of their savings, these risks are more impactful on their ability to meet their goal.

As a trusted advisor, it’s critical to adapt to these differences in planning and focus on creating holistic financial plans and providing solutions that address these risks—likely using different techniques and solutions than what you’ve used in the past. This new process will require a new approach to your practice management (i.e. How many active clients can you manage at once? How many new clients can you support?)

Take time to attend an industry conference to learn about what this shift in approach means for you and your practice. It might require more than just purchasing new financial planning software. Defining an improved ongoing advice, communication and client relationship model are key aspects of your practice that may need to be re-evaluated.

Expand your knowledge. Go beyond the basics of risk tolerance and asset allocation. While this knowledge creates a solid foundation, building on that knowledge by becoming proficient in longevity, liquidity, and inflation risks as well as Social Security, Medicare, and pension benefits will help demonstrate your value to clients.

Understand your clients. Just like the industry has changed, so have the needs of your clients. Pre-retirees and retirees alike need and expect ongoing, holistic advice focused on retirement income. Tailoring your approach is critical to building client trust. For example, does your client like traditional data-intensive formats like completing a detailed questionnaire? Or, does he or she appreciate a more conversational discovery process?

Do they prefer more interactive technologies that enable them to evaluate alternate scenarios in real time? Understanding what makes your clients tick will transform their perception of you as someone who can help them achieve a secure retirement.

Identify client needs, wants and wishes. Once you have established the appropriate discovery process for your clients, assist them with creating a vision of what retirement means to them — what is their ideal retirement date and lifestyle? Help them rank their needs, wants and wishes. Needs represent day-to-day living expenses, such as housing, utilities, food and transportation. Wants represent the “nice-to-haves” such as travel, social activities or discretionary items. Wishes are things clients dream about and hope to achieve. Grouping their finances into these categories will then allow you to develop a balance sheet and income and expense statement.

Exploring what your clients owe, what they have and what they spend allows you to focus on the specific issues for each client. Your clients will look to you to help facilitate this process because it is critical for them to define their “need” compared to a “want.” For some, having money to eat out a few times every month may be an absolute, non-negotiable need while for others this may be viewed as a want.

Leverage technology. Integrating technology into your model provides a client-friendly approach while also saving time for both you and your clients. Technology should facilitate a seamless, secure, two-way connection to transfer information between your customer relationship management system, client account data aggregation software and retirement planning and wealth management systems. The retirement planning software should include the ability to illustrate pension options, Social Security optimization, while also providing details about out-of-pocket health care expenses. Planning software should allow for on-the-spot changes based on client feedback so they can see instant updates within a digital environment.

Work with financial institutions that are devoted to supporting advisors with an advanced holistic planning process. This is a key element for the client to be confident in making key decisions in establishing a base plan and action items.


These are unprecedented times. To have a chance at reaching individuals and motivating them to be retirement ready, we need to change the game and focus on income as the ultimate retirement outcome. Advisors must understand the pressing need for Americans to be retirement ready and respond with new approaches and capabilities that address this need. Advisors must be more involved in the process of helping individuals not only reach retirement but successfully live through it. Following these tips can help you face the constant change head-on.

James Nichols is Head of Retirement Income and Advice Strategy for the Retirement Solutions business at Voya Financial. 

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