3. Managed accounts will continue to grow.Stofer believes managed accounts willcontinue to grow. “One reason managedaccounts are becoming more popular isit is a way to provide advice and education to the participants, even thoughit’s not as much about managing themoney,” he said.
A Vestwell survey found that one
in four advisors plan to offer managed
accounts this year. Schumm noted that
“it is a way to incorporate a more per-
sonal advice solution aside from your
traditional target date offerings.”
He added that there were some rea-
sons managed account acceptance has
been slow: Technology incorporation
was weak, which made the accounts
This is changing, he says, and it’s a
“much easier conversation” for an advi-
sor “to take someone from a target date
plan and roll them out to a personal
wealth account over time.”
4. Decumulation options will be part of
Decumulation, especially with an agingpopulation, will grow in importance,Stofer said.
“[Although] 401(k)s have been suc-
cessful and people are saving money, as
an industry, we haven’t done a great job
of helping people on the spend down,”
he said, adding that the decumulation
side of retirement savings is “every bit as
important as the accumulation.”
When asked about annuity products,
he said they have a bad rap because
some are bad but many have been sold
wrong. “There are some good solutions
out there if properly sold,” he said.
Schumm agreed. “Being able toincorporate that from kind of a softlanding managed outcome to a guaranteed income type structure in someone’s career has not really been nailedyet,” he said. “[But] there’s a lot ofpeople working on it. A lot of peopletalking about it.”
5 Ways COVID- 19 Has IncreasedWomen’s Retirement Worries
Women seem to shoulder much of the worry when it comes to howCOVID- 19 is affecting the economy —and the impact on their finances, thustheir future and retirement — accordingto a 2020 study by Nationwide.
“For several consecutive years, our
Advisor Authority study has revealed
the disconnect between women’s
growing concerns about their ability
to retire and their level of preparation
— and the pandemic has taken this to
new levels,” said Ann Bair, senior vice
president of marketing for Nationwide
Financial, said in a statement. “While
women are acutely aware of the chal-
lenges they face, it’s critical that they
take steps now to address gaps in their
retirement plan, especially as we start
a new year.”
The sixth annual study polled 2,500
women and men, including 1,768 advi-
sors and financial professionals and 817
investors. The investors included 520
men and 297 women. The online survey
was conducted by Harris Poll from May
27 through June 25, 2020.
Here are five key finding of the study:
1. Women were more concerned in 2020
about a recession and a bear market
than they were in 2019.
Findings showed that 82% of womenpolled were concerned about a U.S. economic recession over the next 12 monthsversus 60% in 2019. Again, this poll wasdone in May and June 2020, with theMarch stock plunge still vivid. Also, 74%of women worried about an ongoingU.S. bear market in the next 12 monthsversus 57% in 2019.
2. Women said portfolio losses were
their top financial concern.
It’s no surprise that one of the twolargest financial concerns in 2020
was losses in their portfolio due toCOVID- 19. However, the same shareof respondents, 36%, said protectingtheir assets was a top concern, versus
26% in 2019.
In 2019, the cost of health care wasa major concern of 36%, which fell to21% in 2020. Also key in 2019 was saving enough for retirement, 24%, whichdropped to 16% in 2020.
3. The pandemic is driving women’s
need to find more guaranteed solutions
for the future.
Annuities made inroads, the studyfound, with 59% of women stating theywould feel more secure if a portion ofportfolio was invested in an annuity tohelp protect against market risks. Also,55% stated they would feel more secureif they had invested a portion of theirportfolio in an annuity to help “protectagainst outliving their savings.”
4. Diversification is the main strategy
both women and men use to protect
assets against market risk.
A majority of those surveyed — 52% ofwomen and 59% of men — stated thatdiversification was the main strategythey used to protect assets. Fixed annuities were more popular with women,39%, versus 34% for men. Fixed indexedannuities were used by 26% of womenversus 15% of men.
5. The pandemic hurt the retirement
savings of most women.
Taking into account the timing of thestudy, it’s not surprising that 72% ofwomen said the pandemic had a negative impact on how long they will beable to live off their current retirementsavings. Eighteen percent said there wasno negative impact, and 10% said theydidn’t know.