Retirement is meant to be the time in life when people finally get to relax, yet concerns about pension security, market volatility and scandals have retirees reaching for their heart medication. Some advisors have altered their approach to retirement planning to help relieve this stress.

Retired clients and those planning for retirement are still reeling from the fallout from the boom-bust of 2000, according to David Atwood, a London, Ont.-based financial practitioner. Even more have since become wary of the markets following the wave of reports of expensive executive stock options, scandals involving executives arrested for stealing and others for accounting fraud.

This series of events has meant retirees are re-assessing how they deal with financial markets, Atwood says, explaining some hesitate to become or stay fully invested. “There is a lot more money sitting on the sidelines,” he says. Instead of investing their money, Atwood says clients may be investing elsewhere, like buying real estate or spending their extra cash on consumer goods — a serious concern if clients are spending money they’ll need to rely on later.

“If you had asked me five or ten years ago about the quality of the relationship that I have with my client and the percentage of their assets that I take care of, I would have been quick to say we’re solid and that I manage a 100% of their assets.” He says. “Today I can’t say that.”

Clients in other age groups are also cynical, but retirees and those nearing retirement feel a greater sense of urgency because of they will need to live off those funds sooner. The only solution is to launch a concerted effort to re-engage these clients, Atwood says. “You have to win back their confidence because the window for them is narrower and the pressure is on.” This means advisors need to take extra time with clients to allay their concerns.

Atwood does this by comparing any decreases in his client’s portfolios since 2000 to decreases in indices such as the S&P 500 and, where applicable, showing them how their original capital has not been eroded. Moreover, to win their confidence and insulate their portfolios, he is increasingly using funds containing companies with solid and consistent dividend histories, even if it means less emphasis on capital growth.

The retiree’s client profile for the future is also changing, says John Rother, director of policy and strategy for Washington, D.C.-based AARP Inc. More than demographics are changing as baby boomers approach retirement, he said at a recent retirement conference in the U.S. capital.

All developed countries will have to contend with an aging population, he explains, adding with that comes more diversity within those populations. These shifts will mean greater ethnic and income diversification in these nations. Rother also expects there will be a number of attitudinal and behavioural changes that will complicate matters. One of the big questions will be about when to retire and if the mandatory retirement age should be lifted as life expectancies rise as people adopt healthier lifestyles.

Other more complex issues include trying to accommodate the growing number of self-employed and contact workers, who are not backed up by an employer sponsored plans while grappling with the less successful plans for those who are. Add to that changing family unit, such as the demographic trend towards smaller families and fewer individuals living in traditional married arrangements.

While Rother says it is impossible to generalize about the future of retirement, he feels more people are going to go their own way as they increasingly have the means and interest to customize it. “There’s not going to be any easy way to get your arms around it,” he says.

The increasingly diverse retirement population means advisors are going to have to provide longer, more detailed and more customization their product selection to ensure that available products and finances are sufficiently tailored to the client’s needs. “Typically five or six years ago we sold products without necessarily referring to the uniqueness of the person,” says a veteran Toronto advisor. “[Now] the advisor needs to engage the client more deeply in the process.”

Al Emid is a Toronto-based freelance writer.