For clients, a wake-up call at 50

At age 50 or so, something changes for many investors. They start thinking seriously about how they will support themselves during retirement, according to one investment adviser at the InvestmentNews 2011 Retirement Income Summit this week in Chicago. During their younger years, investors talk to their financial planners about building up their 401(k)s and individual retirement accounts, or buying a new home. But eventually, such savings will form the backbone of their retirement income, and they will look for a financial adviser who can help them get the most out of their money. About 250 advisers attended conference sessions on wringing income out of alternative investments, what to tell clients who are increasingly asking about annuities, how to reconfigure asset allocation models for the retirement years and the intricacies of estate planning. During one session, about half the advisers in attendance raised their hands when asked if they already have an active retirement- planning practice. One adviser said that after years of helping her clients save money, almost all of them seemed to become primarily interested in planning their retirement years overnight. It has become virtually her full-time focus, she said. Some of the discussion topics were more mundane. One reason that advisers with a substantial number of retired clients hesitate to change custodians is because they don't want to take the risk that their clients' monthly income checks will be interrupted, Gerri Leder, founder and president of LederMark Communications LLC, said during one session. Those with active retirement planning businesses were on the lookout for ideas that they could use to market their practices. Barry Blatt, a financial adviser from Feasterville, Pa., said that he wanted to build his retirement-planning practice. One goal for him was to find new ideas for marketing beyond dinner seminars, which he said have outlived their usefulness. At a session that touted the use of commodities, stock option puts and calls and other alternatives to stocks and bonds, advisers quizzed the moderators on how alternatives would contribute to what their clients demand: a steady paycheck during retirement. Ms. Leder suggested that advisers gain expertise in topics that retirees care about, such as long-term-care insurance, Social Security and how to maximize income from a portfolio. In terms of some estate planning issues, such as constructing trusts and maximizing estate tax exemptions, advisers should align themselves with a knowledgeable lawyer, attendees were told. A session on estate planning led by lawyer Natalie B. Choate of Nutter McClennen & Fish LLP featured a 40-page packet of case studies, a glossary of terms and some hair-raising examples of how bad estate planning could cost clients hundreds of thousands of dollars in avoidable income and estate taxes.