Insights | 10.28.20
Why Morningstar Says Advisors Need to Rethink Financial Planning Approach
Eight months into the pandemic, advisors and their clients are rethinking the way they conduct their financial planning, especially their saving and spending strategies, according to Christine Benz, director of personal finance at Morningstar. The current retirement landscape is complicated by the low interest rate environment the Federal Reserve has put in place to stimulate the economy. “Yield for bonds was a big part of retirement income in the past. That is over now because yields are so low. The value an advisor can add is that he or she can determine whether to sell some equity assets for the client to live on. There is a lot of education that needs to take place between the advisor and the client,” she said. “Annuities are also going increase in use in the future,” she added. Advisors can help early-retiree clients by mapping out a plan for their cash flow during retirement, including maximizing nonportfolio income sources like Social Security and making decisions about pensions, Benz said.
Read the full article on Financial Advisor.