On Solid Ground

The majority of financial advisers say their clients’ retirement portfolios have nearly recovered but “the psychological scars run deep,” according to a poll from the SEI Advisor Network.  

“The old mantra for retirement investing was, ‘Income, income, income.’ In reality, that’s far too simplistic,” says Steve Onofrio, managing director of SEI Advisor Network. “Instead, investors may have multiple goals—income, growth and capital preservation—that are mirrored by a goals-based portfolio, in which separate pools of assets are aligned to each objective.”

While most advisers say their clients’ retirement portfolios have largely recovered, only 10% say their portfolios are in “better shape now than they were before the recession”; 10% say their clients’ portfolios are “still playing catch-up.” Though one-third of advisers primarily use a single 60/40 strategy for retirement portfolios, more than half (54%) use “bucketing,” and 12% use annuities.

Most worrisome to Baby Boomers is the possibility of another significant stock market decline (60%) or that they have underestimated how much income they will need for retirement (28%). Only one in 10 advisers said their Boomer clients are most worried about the impact of inflation eroding savings (7%) or making bad investment decisions (3%).

The survey was completed in March by more than 200 advisers during a webinar hosted by SEI about new approaches to retirement strategies.