Advisors should discuss guaranteed lifetime income with clients: survey

An increasing number of Canadians believe a guaranteed lifetime income supplement in retirement is a valuable addition to government programs—and that financial advisors have a responsibility to discuss it, says the 2018 Canadian Guaranteed Lifetime Income Study.

The study, the second by Greenwald & Associates and CANNEX, surveyed 1,003 Canadians aged 55-75 with investable assets of at least $100,000.

Less than half of the respondents (45%) are highly confident they will be able to maintain their standard of living in retirement until their estimated life expectancy of 85; almost one-third (29%) aren’t confident they can maintain their standard of living.

The number of respondents saying they rate guaranteed lifetime income as “highly valuable” was 80%, compared to 60% in the 2015 survey. Three-quarters of women surveyed said a guaranteed lifetime income was highly important in meeting essential expenses versus 64% of men.

About one-quarter (24%) of respondents said they had heard about guaranteed lifetime income products from financial advisors, followed by financial institutions at 18% and the news media at 15%.

Read: What’s the most tax-efficient retirement income source?

Three-quarters of those surveyed (73%) think financial advisors have a responsibility to discuss guaranteed lifetime income products to meet their retirement needs, and many said they would consider changing advisors if it wasn’t discussed. Only one-third of respondents said they had had such a conversation with their advisors.

Of the respondents who had discussed retirement income with an advisor, 44% had a conversation about taking a constant percentage of their savings as income. Twenty-seven percent said income annuities and 16% said segregated funds were discussed as part of a conversation to provide guaranteed income.

“Among the three-quarters of respondents working with financial advisors, retirement income conversations are largely focused around asset withdrawal, investments with dividends, or fixed income strategies,” said Sam Sivarajan, senior vice-president, wealth solutions at The Great-West Life Assurance Company, in a release. “The study shows that guaranteed lifetime income products, more often than not, aren’t part of these discussions.”

Also read:

Why Gen X struggles to save for retirement : survey

When retirees are overextended by extended family

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.