Just How Good Are Advisors at Easing Retirement Worries? 

What can you learn from analyzing 1 million client meetings? Quite a lot, it turns out. 

The AI company Jump recently tapped researchers at the American College of Financial Services to assess how well advisors are easing clients’ fears about retirement and how frequently their financial planning recommendations are actually accepted. The results, based on more than a million real client conversations collected by Jump’s meeting-prep and notetaking tools, were eye-opening, according to Liam Hanlon, vice president of strategy and head of insights. They show advisors are making a real difference for clients when it comes to instilling confidence about retirement and long-term investing. Advisors can struggle with recommendation acceptance, however, and they need to be cautious about how they frame options like buying annuities or delaying Social Security. 

“It’s exciting to be at a point where we can use AI to measure these effects,” Hanlon told Advisor Upside. 

Digging Into the Data

To complement the conversational data, the researchers asked a large group of advisors who they believed spent more time speaking in meetings: themselves or their clients. The vast majority (87%) said clients spent more time talking in a typical meeting, but the real-world data showed the opposite. Advisors spoke the majority of the time in fully 84% of meetings analyzed. That’s not necessarily a bad thing, Hanlon noted, as clients work with advisors specifically to access their expertise and get guidance on complex topics, and the approach seems to be working: 

• Average client sentiment at the start of monthly meetings registered as 6.41 out of 10 over the one-year study period. 
• Average meeting-end sentiment rose to 7.47. 

Unless prompted, clients ask relatively few retirement questions overall, preferring to discuss current news events and near-term developments in their personal lives. When advisors push them to talk about retirement, questions cluster into a set of common topics. These include account management and consolidation, tax management, withdrawal strategies, asset allocation and Social Security decisions. When fears are discussed, topics usually are running out of money, suffering market losses and meeting high healthcare costs. 

The data shows most advisors are doing a good job coaching clients through these issues. Specifically, just 15% of clients felt positive at the start of a given retirement conversation, but it jumped to 87% by the end. 

Room for Improvement? Such numbers show advisors are effective at managing client sentiment on retirement, Hanlon noted, but there is room for improvement when it comes to recommendation acceptance, especially for annuity purchases. The common technique of social framing, which involves telling people that others in their situation generally make a given choice, reduces annuity acceptance by 18%. Default bias framing, which involves telling people a given choice is the logically expected behavior, boosts acceptance by 27%. The bottom line: How advisors talk about retirement topics matters as much as starting those conversations in the first place.