J .P. Morgan Helps Advisers Tackle Tough Issues

As retirement itself has grown more complex, so has the job of guiding people through it successfully. Conversations around sensitive issues are becoming increasingly common and more necessary, yet advisers may be unsure how to start the conversation.

“Any financial adviser dealing with retirement planning in discussions with clients touches on these topics on a daily basis,” said Katherine Roy, executive director and head of individual retirement at J.P. Morgan Asset Management, and one of the guide’s lead authors.

“Any question that walks in the door from a client, advisers can simply flip through the book to find the right page,” Roy told PlanAdviser. “Here, we’ve boiled it down to simple pictures to get to the meat of the matter.”

The guide spans retirement topics in sections for:

• Setting the stage (life expectancy probabilities, older Americans in the workplace, managing expectations of ability to work, Social Security, spending and inflation, and cost of health care in retirement);
• Saving (retirement savings checkpoints, benefits of saving early, evaluating a Roth IRA);
• Spending (typical wealth and sources of income at retirement, the impact of returns on distribution, changes in spending); and
• Investing (structuring a portfolio to match investor goals, diversification, major asset classes versus inflation, the impact of being out of the market).

(Cont’d)

Another feature of the guide is that it speaks to the profile of most financial advisers who, Roy said, are good at living in a quantitative world where things are measurable. “Retirement pulls them out of their comfort zone and into less comfortable topics that are qualitative. The guide helps them discuss issues in a quantitative way.”

The rising costs of health care and people’s concern about how they will pay for it continue to arise. Studies are starting to show that it is the financial adviser who is going to be the person to help people navigate how to anticipate and plan for those costs. Yet, Roy said, “A few years ago they had that deer-in-the-headlights look when the topic came up.”

She predicts there will be more opportunity and more need for advisers to cover these issues with clients.

Advisers can use the guide to hone in on a question about Social Security or income. As Roy points out, income in retirement has a lot of facets. The guide can help pinpoint whether it’s sources of income or changes in spending habits or the effects of withdrawal rates that are top of mind.

“What can begin as one conversation can quickly morph into another,” Roy said, “which is why it’s so great to have it all in one place.” 

Another tool is in the guide’s appendix, which contains graphs on Medicare, Roth and traditional IRAs, and annuity basics. “Clients continue to think Medicare is going to be more comprehensive than it actually is,” Roy noted.

On Friday, the guide will launch in digital format online. “Rather than just looking through a PDF, it’s an interactive way to browse the guide, listening to audio for back stories and more education in order to understand the American landscape,” said Cathy Peterson, vice president of Retirement Insight, J. P. Morgan Asset Management.

Financial advisers can find what they need by searching for specific topics. “Advisers can experience and read the key talking points to make sure they are well versed before they talk with clients,” Peterson added.

The Retirement Guide is free of charge and available here.