With recession fears constantly looming, inflation soaring, and new regulations, including the SECURE 2.0 Act, clients frequently name retirement security as their top financial priority – putting the onus on advisors to be prepared for these important conversations. 

Retirement Income Certified Professional® (RICP®) Program Director Eric Ludwig, CFP® hosted the panel discussion on retirement planning along with four members of The College’s FinServe Network who work primarily with clients in this area. Subjects ranged from inflation and taxation to shifts in banking systems, financial literacy, and more. 

Preparation Means Greater Security

Ludwig started off the conversation by noting the two biggest disruptors for retirement planning today – recession fears and inflation – and how these combined worries can cause anxiety about retirement security for many clients. 

FinServe Network advisors said that while they have seen an increase in concern from clients, they also see current turbulence as an opportunity to encourage clients to engage more with them. “I think fear typically comes from not knowing, so if you’ve talked with clients beforehand and prepared for different situations, you can create momentum like in football planning,” said Padric Scott, AEP®, CFP®, CAP®, ChFC®, CLU®, WMCP®, CCFC, President and CEO of Crossroad Capital Partners. “Seeing the excitement in them to get to planning and stick with the plan all comes from setting expectations early on.” 

Jason Austell, CFP®, MSFS, ChFC®, CLU®, CASL®, RICP®, AEP®, CAP®, a financial planner at MassMutual Carolinas, agreed, saying that advisors need to equip themselves with a toolbox of knowledge and strategies and be prepared to alter their planning depending on shifts in the financial landscape. “What we use today may not be exactly what we need next week, next year, and so forth,” he said. “It helps to have a baseline of confidence in a portion of a client’s money and know they’re not going to lose that, so they can take more but appropriate risks with what they have left and try to build up assets that will support their needs long-term.” 

Keeping Clients in the Loop

Ludwig also noted that since the stock market crash of 2008, various types of assets and planning strategies have experienced ups and downs in effectiveness that have forced advisors to rethink how they approach retirement planning – including the relatively recent end to a long period of low interest rates due to rising inflation. Several of the advisors present shared stories of clients they’d worked with who were caught by surprise when unexpected situations disrupted their planning and emphasized the value of preparing for any eventuality – and educating clients while doing it. 

“One of my clients and her husband are in their late 70s and believed they didn’t need any help with their retirement planning,” said Nancy Du, MBA RICP®, CFP®, a financial advisor at Ashford Advisors. “But then in 2022 the stock market tanked and her husband was diagnosed with dementia. She panicked and sold everything they owned in the market, thinking it was the right thing to do, before coming to me for help. Since then we’ve ensured they have a good portfolio, pension plan, and annuities to support their retirement lifestyle and care, but it reinforces the idea that people need to be aware of their situation and their goals.” 

The power of working with informed clients was a recurring theme and one that Terry Parham, CFP®, ChFC®, CLU®, RICP®, WMCP®, a financial planner and co-founder of Innovative Wealth Building, elaborated on, pointing out the power of resources like RISA profiles and retirement styles. “It’s a natural human tendency to see people going a certain direction from social media or the news and go that direction too,” he said. “It’s like Costco on a Saturday: long lines everywhere, and as soon as a new one opens, everyone jumps in that line and makes it long again. We need to look at the specifics of each client’s situation and help them realize that we live in a dynamic world where truths about money are always changing.” 

Getting Ahead of Retirement Planning

Overall, the panel of advisors agreed that one of the keys to sound retirement planning is to work more closely with clients and form a relationship founded on both business and personal levels. The panelists repeatedly returned to the themes of proper planning made well in advance of crisis situations to help reduce the risk of running out of money in retirement and being proactive rather than reactive. 

“I always ask people, would you rather be punching someone in the mouth or getting punched in the mouth?” said Scott. “Allowing your money to be wasted with unnecessary taxes when you could have planned against it is like allowing Uncle Sam to punch you in the mouth. Why not get ahead of all that? If you’re delaying Social Security for a lower income base, front-run some of those dollars so you can then think long-term. If you end up in a situation where you have a lot of extra income, you’re not going to be using it anyway, and you’re setting yourself up for failure. It’s so important to get the lay of the land, find the mines you need to navigate with your clients and adjust accordingly.”

Ludwig is a financial planner, researcher, and educator with a Master of Science in finance and a PhD in personal financial planning. He also has a wide array of professional experience in the financial services industry, including as a wealth management advisor for U.S. Bank, a researcher at the Investor Behavior Lab, and a peer review board member for the Journal of Financial Planning and the Financial Planning Association (FPA), as well as teaching at various institutions in several capacities. 

We asked Ludwig five questions about his career, his path to the financial services profession, and what he hopes to accomplish as a faculty member at The College. 

How did you decide on financial services as your career path, particularly retirement planning education and research? 

When I was growing up, my dad, who was the CFO of a company, had a hobby of personal investing, and I thought it was normal for parents to talk about the Wall Street Journal with their kids. I also had crazy timing with my career journey. I was halfway through flight training when 9/11 happened. After that, I worked as an airline pilot from 2003 to 2007, but the industry was struggling then, and the pay and schedules were pretty bad. During that period, I loved reading everything and anything about personal finance, and I enjoyed helping people as a flight instructor. Eventually, I realized there was a job that combined both those passions – becoming a financial advisor. 

In September of 2007, I made the switch – right before the Great Recession. The market dropped 50% during my first 18 months on the job, greatly impacting me. Despite my best efforts, some clients bailed to preserve their cash during the crisis and didn't get back in until several years later, negatively impacting their retirement plans. That experience sparked my interest in learning more about how to apply the psychology of retirement planning, eventually leading to my pursuit of a PhD specializing in that area of research. Because of my practical experience as a client-facing advisor, I view research through the lens of how advisors can use this information to improve client outcomes. 

How has retirement planning changed since the Covid-19 pandemic, and what are the next big disruptions professionals must look out for? 

One of the most noticeable changes in the financial planning industry is the shift in how services are delivered to clients. In-person meetings at the advisor's office have been augmented, if not replaced, by a significant increase in online platforms such as Zoom. This has opened various new opportunities for advisors to serve their clients online, such as sharing timely information through blogs and podcasts and utilizing online financial planning tools. 

Another trend that has gained momentum is using artificial intelligence (AI) as a tool for advisors to serve clients; however, AI is not expected to replace advisors but rather complement their services. The industry will likely see further advancements in AI, which will continue to enhance how advisors serve their clients. 

What are the most important questions consumers need to be asked—or be asking themselves—about retirement in today’s environment? 

Planning for retirement, and in retirement, is complex and stressful for many people. Pension programs continue to be phased out, and the responsibility is being shifted to individuals to save for their own retirement. Tax laws also change, and, let's face it, the economy is in constant flux. Individuals should ask themselves to what extent they have the knowledge, interest, and time to do it on their own or whether they would benefit from the help of a well-educated advisor. 

Results from previous retirement income literacy surveys show general overconfidence regarding what people think they know about retirement planning versus how much they actually know. The results of The College’s 2023 survey will highlight areas where advisors can help clients with their financial outcomes, retirement income planning, and how to help increase their retirement confidence. 

What do you think The College’s Retirement Income Certified Professional® (RICP®) Program program does well, and how will it have to evolve? 

I may be biased, but I think the RICP® program should be the go-to choice for advisors specializing in retirement planning. RICP® goes deep into the weeds with three advanced courses that provide specialized training. One of the program's key advantages is its ability to bring in leading subject matter experts from the retirement planning world, such as Michael Kitces and David Blanchett, PhD, MSFS, CFA, CLU®, ChFC®, CFP®. These experts provide cutting-edge, modernized education not found in other financial planning programs. Additionally, the RICP® program focuses on the behavioral side of retirement planning, giving its graduates the technical and soft skills necessary to help clients navigate the complexities of retirement with confidence. 

For advisors who are serious about specializing in retirement planning and providing the best possible service to their clients, the RICP® program is an excellent choice. 

Do you have any pieces of advice for today’s up-and-coming financial professionals? 

I think it goes back to what I’ve been saying throughout this conversation: being a financial professional requires both technical skills and interpersonal skills. 

Take something like building a retirement portfolio and distribution plan for a client that aligns with their wants and needs. That obviously requires a certain amount of technical skill. Now think about what happens during a market downturn or an unexpected health issue pops up. The advisor will also need soft skills like empathy and active listening. 

Ultimately it comes down to the Golden Rule: treat your clients how you would want to be treated.

Learn more about our extensive, intensive retirement incoming planning education with the RICP® Program.