Displaying items by tag: wealth

In an article for ThinkAdvisor, Sudipto Bannerjee, Ph.D. and the VP of Retirement Thought Leadership at T. Rowe Price, distilled some advice for advisors on how to educate clients about annuities. 

Recent research indicates that 70% of retirees are managing their money with the intention to preserve assets. While most of the discussion is about saving or investing, more important is how retirees will choose to spend their savings.

Given this reality, annuities offer major advantages since it comes with longevity protection, tax advantages, and potentially even income guarantees. It also reduces the risk that retirees will exhaust their savings. 

The research indicates that retirees prioritize asset presentation, and it has a major impact on well-being. And, they cite running out of money as their biggest fear. Thus, annuities can be useful to accomplish both objectives. 

We can see how this plays out by comparing the performance of retirees who have a pension against those that don’t. After 18 years of retirement, retirees with a pension only saw a 4% drop in assets, while those without a pension saw a 34% reduction in total assets. 

Finsum: Annuities are a great option for investors especially since a guaranteed income leads to increased preservation of assets. 

Wealth managers, unite!

Or some such thing.

A wider swath of them is jumping into alternative – and often less liquid, assets, according to investmentnews.com. The strategy’s come at the cost of traditional asset classes, from which they’ve retreated.

Investors in or approaching retirement are eyeing alternatives in light of the one two punch of a volatile stock market and steepling inflation.

Among wealth managers globally, inflation is their top headache, according to a recently released Mercer survey. In the upcoming two years, investment returns were expected to be lower than they’ve experienced in recent years among nearly half of the respondents.

“It is encouraging to see the majority of wealth managers embracing and investing in illiquid and other alternative asset classes, citing yield and return potential. With traditional asset classes unlikely to generate the same level of returns in the next few years as they did in the past, it is critical that wealth managers’ client portfolios are positioned to seize the widest range of investment opportunities,” Gregg Sommer, partner and US financial intermediaries leader at Mercer, said in a statement.

While the stock market’s works wonders when it comes to feeding the bottom line, among some investors, alternative investments could be an ideal fit the portfolio as well, according to fool.com.

Some of the most popular type to consider:

• Real estate
• Crowdfunding
• Peer-to-peer lending
• Commodities
• Hedge fund investing
• Cryptocurrency
• Art