A combination of product and advice solutions are required in addressing the challenges of retirement planning, says Craig McCulloch, senior consultant, Milliman.
McCulloch (at right in the picture) told the 2015 Post Retirement Conference that product solutions can often be sold as a cure-all for retirement planning.
“Invariably they are sold as some kind of panacea, and clearly that creates expectation gaps for people…they aren’t a magic panacea,” he said.
He said that in terms of processes, these need to consider clients’ tolerance versus capacity for risk, their level of engagement and compliance challenges.
McCulloch said that above all, a focus on outcomes is critical.
Better data
Dan Miles, co-chief investment officer, Innova Asset Management, said giving advisers access to better data and modelling can improve results for clients.
“We need to provide advisers with better data and allow practices to have better conversations with their clients. We want to achieve increased client engagement,” Miles said.
“If you can show clients…then you can achieve an emotional response, and that’s the job of the adviser.”
Miles said client engagement must be ongoing and provide for follow-up meetings for discussion and maintenance.
“As an adviser, it’s not your job to predict the future, but to show what could happen in various scenarios,” he said.
Miles said that outcomes are the main focus, saying that advisers should be “product agnostic”.
“To achieve their goals, clients may need to take on an element of risk, your job is to educate them on what happens if things go wrong,” he said.
“”art of our role as advisers is to protect clients from themselves…and I think that’s why it’s so important to think about outcomes.”
