Because their financial situation rarely changes due to either immediate concerns or for planning purposes, retired investors sometimes wonder if they get the proper attention from their financial advisors.
When market conditions become volatile, that concern level rises. Retired investors may believe the more active working investors are primary targets for communication from advisors, while those retired investors believe they must wait longer for advisor contact because of the settled nature of their portfolio and investment priorities.
But advisors proved to be reliable to retired investors during the weird and wacky month of December, 2018, when the stock market lost 4,000 points from high to low.
According to a Spectrem survey of more than 500 investors, two-thirds of retired investors received contact from their financial advisor during the month of December. That was a higher rate of contact than what was reported by working investors (58 percent).
Retirement these days does not necessarily mean the end of life as we know it. Improved health among older Americans, and the opportunity for many investors to retire at a younger age, means retirement can be an active time. And active retirees are possibly going to be actively watching their portfolios rather than sitting back and calmly watching their assets dwindle.
But the old standby theme of retired investors being overly worried about their portfolio status and investment successes may still be true. As such, when the market tanks as it did in December, retired investors are looking for additional advice to protect themselves against undue losses.
Among the retired investors who did hear from their advisor during the December stock market mini-crash, 63 percent received a phone call from their advisor, and 17 percent received a directed e-mail as opposed to a blast e-mail (which 9 percent of retired investors said they received). That is a high level of personal contact that retired investors likely appreciated.
A small majority (55 percent) of those retired investors who were contacted by their financial advisor during the December stock market event said the call was a general invitation to talk rather than a call with directed advice (45 percent). But the most revealing fact from the survey was that 75 percent of the retired investors contacted were told by their advisor to not react to the roiling stock market totals. In effect, advisors contacted their retired clients to tell them not to panic.
There is no way to know if any investors, retired or working, actually panicked at the end of 2018, but it probably was beneficial to have a professional advisor specifically state that all will be well and it is appropriate to wait out the temporary dip in stock market numbers.
Fourteen percent of retired investors were told to reallocate assets during the December swoon. Considering the bounceback growth of the market in February of 2019, one wonders whether those investors considered that advice to be wise.
Of the one-third of retired investors who did not hear from their advisor in December of 2018, only 13 percent reported disappointment that they did not receive contact.
©2019 Spectrem Group