Millions are spent by financial institutions, consumers, and state and federal governments to educate people about retirement. These can range from government studies, to educational workshops, to advertising solutions to address consumer’s retirement and investment goals. Yet according to a Deloitte Center for Financial Services survey found 58% of Americans do not have a proper plan for retirement.
According to the Study, there were five main breakdowns between consumers and achieving their goals:
- Failure of Priorities: While many people consider retirement a major concern, many fail to prioritize these long-term needs over their more immediate financial priorities.
- Failure to Communicate: The financial industry fails to effectively reach Americans who have the greatest need for advice or solutions. From within the workplace to individually, they need to better integrate retirement needs within their overall finances.
- Educational Failure: Many consumers are simply not educated enough on the available product solutions offered for retirement.
- Failure of Trust: Many consumers distrust that the financial industry (from companies to advisors) has their best interest at heart and can provide the services they claim.
- Failure of Overconfidence: On the other hand, many consumers said they could do a better job themselves than the professionals, despite the complexity of retirement finances.
Overall this boils down to two main areas that need to be addressed by consumer and industry alike. The first three failures are not surprising even though the financial industry spent over $1 Billion in 2011 to educate and advertise their products and services. Financial Planning, for many, is like watching paint dry. For many, it is as interesting as doing your taxes. Whereas, the NFL, Cable TV, and People Magazine are far more interesting, many could quote you the starting QB of their local team or the latest intrigue on their favorite TV drama. As consumers, we need to recognize the answers are out there and we need to dedicate time into educating ourselves on these solutions.
The second piece of that puzzle is the Industry needs to address the ethical concerns and biases that the financial system creates. And it’s not just the Bernie Madoffs, Failures 4 and 5 are a symptom of perception of true value of advice being offered in our industry. If CPA services were free, how many people wouldn’t have a CPA at least review their tax return? Yet, even though many advisors offer free consultations, the same consumers would pass on the offer because they are worried about being sold. More organizations like Annuity123.com need to be formed and taken main stream that can provide no cost, no pressure education on all the segments of our industry.