The Annual Retiree Insight Program Year 4

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Morris Dorsey
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A n O n g o i n g, I n - d e p t h, C o m p r e h e n s i v e S t u d y : The Annual Retiree Insight Program Year 4 Project Overview Deliverables Table of Contents Subscription Pricing Greenwald &

emerging and current retiree populations. This program tracks and analyzes key changes in older consumers needs, preferences, attitudes, behaviors and decisions from year to year.

1 A n O n g o i n g, I n - d e p t h, C o m p r e h e n s i v e S t u d y : The Annual Retiree Insight Program Year 4 Project Overview Deliverables Table of Contents Subscription Pricing Greenwald & Associates and The Diversified Services Group have joined together and recently completed the 4th year of an ongoing program of research to develop a comprehensive, in-depth understanding of the emerging and current retiree populations. This program tracks and analyzes key changes in older consumers needs, preferences, attitudes, behaviors and decisions from year to year. Research concerning financial advisors who provide retirement planning and investment services to pre-retirees and retirees is also included in the research program. Greenwald & Associates and The Diversified Services Group, Inc.

2 The Annual Retiree Insight Program Year 4 P r o g r a m O v e r v i e w The very nature of retirement, financial planning and product usage during retirement will undergo significant change over the next several years. The incidence of defined benefit coverage is going down, higher health care costs are putting more pressure on retiree finances, more people are entering retirement with debt, home values are experiencing slow growth and the challenges of managing money in retirement have become more severe due to record low interest rates and equity market volatility. Designed as an annually recurring program, the primary purpose of The Retiree Insight Program is to develop a comprehensive, in-depth understanding of behaviors, needs, and decisions of near-retired and retired consumers, as they deal with the problems of managing money in retirement and choosing appropriate solutions for themselves. This research program, developed and conducted jointly by Greenwald & Associates and Diversified Services Group, Inc., with additional input and suggestions provided by Co-Sponsors of the research, provides financial services companies with new insights that will enable them to better target their marketing and product development and better penetrate the rapidly growing older age segment. Similar to previous years, elements of the 4 th Annual Research Program were renewed in order to track consumer reactions to new perspectives and challenges that result from ongoing changes in the financial and regulatory environment, as well as understanding retiree life events and their effect on behaviors and attitudes. In this most recent multi-faceted study, the Retiree Insight Program focused on retirement income planning issues from the perspective of the consumer as well as the financial advisor. These issues included asset goals and spending behaviors; interest in downside protection products; how personality traits impact behavioral risk and receptivity to products; the effectiveness of financial planning tools and risk tolerance questionnaires; the use and appeal of different retirement income strategies; and health care and long-term care expense planning. This was achieved through five distinct research stages, examining people ages 60 to 75 and financial advisors, experienced in providing retirement income planning and solutions to their client base. 1. Phase I -Consumer Focus Groups: two with pre-retirees and two with retirees. All participants were screened to be the primary financial decision maker in their household, have investable assets between $300,000 to $2 Million; not receive, or expect to receive, pension benefit income; and planning to retire or recently retired from primary career within 3 years. These groups explored preparation for retirement, the impact of emotions, lifestyle 1

3 expectations, spending patterns, reactions to tools and projections, and downside protection products. 2. Phase II - Financial Advisor Focus Groups: Two with Financial advisors with at least 5 years of experience, with gross revenue of at least $250,000 ($400,000 if over 10 years of experience); with 75% of their income from financial planning and investments sold to individuals; and at least 40% of total income came from clients ages 60 to 80 with a typical level of investable assets of at least $300,000; 3. Phase III Consumer Survey: An online survey of 1,201 pre-retirees and retirees ages 60-75: 1,000 with investable assets of at least $200,000 and an additional 200 with investable assets of $100,000 to $199,999. None of the participants had or expected any guaranteed lifetime income from a defined benefit pension plan. Information for this report was collected from 20-minute online interviews with 1,201 consumers ages using the Research Now online panel. The survey was conducted in August In addition, 251 consumers ages 50 to 59 were also surveyed. This younger sample was weighted and analyzed separately. Key results for this younger segment of consumers are presented in a separate section in the report. 4. Phase IV Financial Advisor Survey: Results were derived from an online survey of 307 financial advisors who participated in 20-minute online interviews. Financial Advisors were screened to have at least 20% of their clients ages 55 and over. In addition to meeting the client age requirement, advisors had to derive at least 40% of their income from work with individual clients, have pre-tax personal income from their financial advisor work of at least $100,000, and at least three years of experience. 5. Phase V Consumer Journey Mapping Study 1 : A Comprehensive journey mapping conducted over a seven month period through a) an initial survey of 350 people who intended to retire within a year or had retired within the past year, b) a follow-up survey two months later with 175 of those who participated in the first survey, c) a follow-up survey two months after that of 100 retirees from the earlier waves; and d) an electronic bulletin board qualitative study, conducted over three days, with 15 people who participated in the prior surveys. Major competitors from all retirement industry segments were Sponsors of this syndicated research program and were able to contribute input to focus group discussion guides, survey questions, and information objectives. Five in-depth reports were provided to sponsors after each phase of the program. In addition, executive 1 Some participants did have defined retirement benefits 2

4 summary reports were prepared for each Phase of the research. At the completion of the research, a one-day Sponsors forum was held giving the Sponsors an opportunity to hear a high level presentation and to exchange insights on the findings of the program. An elective top line on-site presentation at each subscriber firm is also included in the subscription price. P r o g r a m D e l i v e r a b l e s This program is the latest collaborative effort between Greenwald and DSG and highlights business and marketing opportunities to pre-retired and retired individuals and households. The program provides a useful framework, actionable insights, and relevant market information to help management better understand and act on consumers perspectives on retirement. Program results are contained in reports from the five phases of the program along with a summary presentation (Phase VI) given at the subscriber roundtable forum. The deliverables include: The Phase I and II qualitative report, summarizing the focus group research findings. This report also includes the topic guides used to lead the focus group discussions. The Phase III consumer (pre-retiree and retiree) quantitative research report, including an executive summary, the online survey questionnaire and weighted banner tables. The Phase IV financial advisor quantitative survey report, including an executive summary, research findings derived from a survey of representatives drawn from captive career agency channels, wirehouses, regional broker/dealers, bank channels of distribution and independent advisors/planners, the online survey questionnaire and weighted banner tables. The Phase V report covering findings and an analysis of the four stages of the Consumer Journey Mapping Research, including an executive summary, and directional considerations/implications. Phase VI: The Retiree Insight Summary Presentation Deck, underscoring key findings from the program and supplemented by additional segments and analysis of the findings derived from the Research results. This presentation was used to frame the one day Sponsors Forum attended by representatives from Sponsor firms in New York in November. 3

5 P H A S E 1 & 2 T a b l e o f C o n t e n t s f o r F o c u s G r o u p R e p o r t : F o c u s G r o u p s w i t h A d v i s o r s, P r e - R e t i r e e s a n d R e t i r e e s Page Methodology 3 Key Findings & Implications 5 Detailed Findings: Viewpoints of Advisors 15 Detailed Findings: Viewpoints of Retirees and Pre-Retirees 35 An Executive Summary Highlights Report, Focus Group Participants Screening guides, Moderator s guides, and, if requested, Transcripts for all six Focus Groups are included with the Report. 4

6 P H A S E 3 T a b l e o f C o n t e n t s f o r Q u a n t i t a t i v e R e p o r t : S u r v e y o f C o n s u m e r A t t i t u d e s a n d P e r c e p t i o n s Page Methodology 3 Key Findings and Interpretations of the Researchers 4 Detailed Findings 13 Use of Financial Advisors 14 Interest in Robo-Advice 36 Asset Management 42 Risk Tolerance and Personality Traits 47 Home Ownership and Equity 62 Issues Specific to Consumers Age 70 and Above 75 Comparison to Consumers Ages Demographics 83 Appendix: Construction of the Nine Key Personality Traits 88 The following deliverables are also included with the Consumer Survey Final Report 1. An Executive Summary Report ~ A summary report of the research findings and directional considerations; 2. The Consumer Survey Posted Questionnaire; 3. Five Banner Reports in word.doc. format for the Consumer Survey, including a Weighted Marginals banner 5

7 P H A S E 4 T a b l e o f C o n t e n t s f o r Q u a n t i t a t i v e R e p o r t : S u r v e y o f F i n a n c i a l A d v i s o r s R e p o r t Page Methodology 3 Key Findings and Interpretations of the Researchers 4 Detailed Findings 15 Approaches to Advising Retirees and Pre-Retirees 16 Compensation 27 Value Proposition 37 Fiduciary Standards 44 Demographics 67 The following deliverables are also included with the Survey of Financial Advisors Final Report: 1. An Executive Summary that focuses on select key findings and includes the methodology. 2. The Posted financial advisor survey questionnaire 6

8 P H A S E 5 T a b l e o f C o n t e n t s f o r T h e J o u r n e y M a p p i n g C o n s u m e r R e s e a r c h R e p o r t Methodology 3 Key Findings and Interpretations of the Researchers 4 Page Detailed Findings 19 Journey Map 20 Retirement Planning Tasks: How People Prepare and When 34 Evaluating the Job of Preparing for Retirement 46 Sources of Help During Retirement Planning 59 Touch Points in the Year Before and After Retirement 72 Advisor Interaction 85 Income in Retirement 93 Spending in Retirement 100 Managing Investments in Retirement 109 Overall Demographics 119 An executive summary report covering the Journey Mapping key research findings and directional considerations distilled from the full Journey Mapping Report is also included. 7

9 P H A S E 6 S p o n s o r s F o r u m P r e s e n t a t i o n T a b l e o f C o n t e n t s f o r S p o n s o r s F o r u m - S u m m a r y P r e s e n t a t i o n : K e y F i n d i n g s a n d I m p l i c a t i o n s Page 1. Methodology & Background 2 2. Expected Impact of Fiduciary Standards Regulations Personality Traits The Value of Advice 65 a. The Value of Advice 86 b. Robo-Advisors The Retirement Journey 91 a. Timing of Activities 94 b. Activities 103 c. Confidence and Satisfaction 108 d. Opportunity Points 118 e. Income and Spending The Use of Home Equity Guidance on Final Reports and Issues for Note: In addition to a copy of the Sponsors Forum Presentation deck, covering all phases of the Retiree Insights Program research, subscribers of the complete Retiree Insights Project will receive a Follow Up Report, covering research sorts requested by the Sponsors, and an Executive Summary Report, covering all Phases of the Research with analysis and directional considerations. 8

10 P r i c i n g f o r t h e P r o g r a m The cost of all components of the Retiree Insights program is $20,000. A Subscription includes a top line presentation of the research results by Greenwald and DSG principals at the Subscriber s offices. If preferred, each phase may be also purchased individually for $10,000 (qualitative study) and/or $15,000 (for each quantitative study or the secondary research report and analysis on consumer spending). NOTE: The Presentation deck for the Subscribers Forum, the Follow On Report, and the Executive Summary of all phases of the research are not available for standalone purchase, and are included only with a full subscription to the Program. A W o r d A b o u t G r e e n w a l d A s s o c i a t e s a n d D S G Greenwald & Associates and the Diversified Services Group, Inc. have both worked with numerous client firms in the financial services industry on meeting the needs of retirees. Believing that the combined expertise, breadth and depth of the two organizations, particularly with regard to retirement market issues, will provide greater value to our clients, we have joined forces on this comprehensive research program. The united effort brings significant resources to bear on this research initiative, and clients will benefit from both firms participating in the project execution, the analysis of the findings, and the development of ideas and solutions for complex market issues. For more information about this program, please contact either: Borden Ayers Diversified Services Group, Inc. 175 Strafford Avenue, Suite One Wayne, PA Phone: , ext. 2 bordena@dsg-network.com Matt Greenwald Greenwald & Associates 4201 Connecticut Ave., NW, Suite 620 Washington, DC Phone: , ext: mathewgreenwald@greenwaldresearch.com 9

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