Saying you specilalize in working with retirees is not a niche. You need to focus on a segment of the retirement business. Advisors who tailor their practices toward the retirement needs of specific types of retirees can develop a niche, offer a higher level of service, and satisfy clients better.
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Segments of the retiree population have different needs. Advisors seeking to advise retirees may want to consider targeted servcies that cater to the special needs of each segment of the retiree market.
Boomers are notoriously unprepared for retirement. Pensions, which secured the retirement of previous generations, are severely underfunded. Health insurance used to be provided for life after an employee retired. No more. Trusted advisors can help. For example, understanding what types of investments can be placed within an IRA may make a difference in retirement quality of life. Hedge funds, private equity, and even operating companies can be held and may offer better returns than traditional investments.
The mass affluent are the ones most affected by economic burdens. A recent LIMRA survey said that fewer than 35% of respondents felt they had put away enough to ensure the lifestyle they wanted during retirement. This is despite the fact that 85% of Americans do have some retirement savings accumulated. Understanding retirement plan rules is imperative to avoid costly penalties. This segment also must balance generating income from their investments along with continued growth. Even those at $1 million to $5 million asset levels cannot afford to only focus on distribution.
The ultra wealthy’s retirement needs are different. They don’t need to worry about having enough money as much as liquidity and income needs. The ultra-wealthy must focus on capital preservation and long-term growth. They must guard against locking up too many assets in illiquid investments. If the family business is sold, understanding how to position their now liquid wealth is a significant concern and brings in other issues like succession planning, legacy planning, estate planning, and new entrepreneurial pursuits.
Women who have successful businesses may still not have prepared well for retirement. They face the possibility of living longer than their spouses or significant others. Women may not know the extent of possible needs during their retirement years. They may need financial education and to understand the range of options available. Retirement planners tend to focus on couples. Since women have the greatest likelihood of being single in their retirement years, either by death of a spouse or divorce, advisors have a prime opportunity here.
Gen X and Millennials
are beginning to prepare for retirement early and also need educating
about planning for retirement. Planning for retirement while they are starting families, developing companies, or launching careers becomes a tricky balance. These generations are starting early because they are worried that most of their retirement burden will fall solely on their shoulders. They research retirement options on the internet. They need the guidance of a trusted advisor to discern good information from bad.
Which segment do you want to work with? If you have not targeted a niche in the retirement advice business, you're probably not working with all the right clients.
A little strategic planning can go a long way in helping you develop services and strengths that match your niches in the retirement business.