The approach that advisors take for retirement planning will be changing drastically over the next few years, according to Bruce Wolfe managing director at Allianz Global Investors and chair of the Allianz U.S. Retirement Market Executive Committee. Wolfe made his comments at the Bank Insurance & Securities Association conference earlier this week in a session entitled, “The Donut Dilemma - Why No One Cares About Retirement Income...Yet.”

Once advisors recognize all the necessary behavioral issues of their clients, and change their own client-relationship strategies accordingly, the entire industry landscape will be different, Wolfe says.

In addition to the emotional issues in clients’ financial decision-making, most advisors’ skill sets simply are not aligned with the task ahead. While clients will need help with decumulation, most advisors are skilled at accumulation. He noted a few statistics that illustrate this in the percentage of households with various financial products. For instance, mutual funds were at 45%; life insurance, 44%; and annuities at a very distant third place at 6%.

What to do? First, you need to talk about it, he says. When a client hits 55, there needs to be a serious conversation about retirement income, he said. And it has to be “the right conversation.” That is, it can’t just be about one elusive number the client wants to attain before retirement. Rather, it needs to be more specifically about an asset-to-income ratio.

And to alleviate compulsive buying and selling, he also suggested having a conversation about a wide range of possible market outcomes. That is, discuss exactly what the client will do if the market, say, increases 10%. Or if it decreases 20%. And write it down. That should help frantic calls to sell everything whenever the market tanks, he says. “When the market goes way up or down, people are in an emotional state,” he says. And advisors need to account for that in order to really help, he says.