Russell Uncovers Cognitive Gap Between Clients And Advisors...And Comes Up With A New Retirement "Number"

Thursday, September 15, 2011 08:04
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Russell Uncovers Cognitive Gap Between Clients And Advisors...And Comes Up With A New Retirement

Advisors think their clients pay them for coaching and "stay the course" pep talks. It turns out that a lot of those clients really just want to be kept from making mistakes.

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New research from Russell Investments reveals that advisors spend a lot of effort motivating their clients to invest rationally, without emotional swings. A full 55% say that's the biggest part of their value-added proposition.

 

But, they say, their clients are already more interested in the hard numbers than in the coaching.

 

Significantly, these advisors say would like better tools for steering conversations with clients whose expectations are unrealistic. Planning scenarios and Monte Carlo should do that nicely, shouldn't they?

 

If you lay out the numbers and the plan just doesn't have a good shot at coming to fruition, that's about as convincing as it gets.

 

Speaking of which, Russell's also come up with a new retirement "number" for back-of-the-envelope self-directed investors.

 

They say that as long as someone saves 30% of their expected retirement income every year, they should be fine.

 

Naturally, it's never going to be quite so simple, but these numbers definitely have a lot of traction in the public consciousness.

 

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