They aren't getting the post-work planning they need to retire in comfort. It may come as no shock to learn that wealthy people have lofty financial aspirations. But a new report by asset manager and insurance provider Phoenix suggests that many high-net-worth people lack the financial planning - especially the post-accumulation financial planning - it takes to make those dreams come close to reality.

Phoenix' seventh annual Wealth Survey "reveals a significant gap between reality and expectations among high-net-worth individuals," says Walter Zultowski, a senior v.p. of research and concept development at Hartford, Conn.-based Phoenix. "They have set considerable goals for a financially secure retirement but haven't made specific plans, purchased the right products, or established a relationship with a financial planner who will help them achieve their goals."

They need help

The study of more than 1,600 individuals worth at least $1 million net shows unrealistic expectations for retirement income, reflecting the belief, shared by nearly half the respondents, that they will need 100 percent or more of their current income to secure a comfortable retirement, even though conventional wisdom suggests 80 percent of peak working income is an appropriate goal.

Paradoxically, the study also suggests that the affluent are growing increasingly skittish about the effect of rising health-care costs and other adverse economic conditions on their standards of life in retirement. Partly as a result of these worries, one in five of those surveyed feel a need to postpone retirement.

At least as alarming, the study further shows that - despite the financial service industry's increased focus on the affluent consumer - the high-net-worth market remains under-served and misunderstood.

"High-net-worth consumers tend to have relationships with more than one investment firm, but even in the cases where they say they have a primary financial advisor, the guidance tends to focus almost exclusively on wealth accumulation at the expense of long-term financial planning," says Zultowski.

Given the rising forecasts for life expectancy in the U.S. - 80 now, up from 72 in 1955, with a 65-year-old woman having one chance in four of seeing her 94th birthday - and a falling average retirement ages - 62 now, down from 68 in 1955 - Phoenix is calling for an industry-wide resolve to focus somewhat less on wealth-accumulation strategies for the working wealthy and more on income streams for high-net-worth individuals' post-work years.

Anyone interested in obtaining an executive summary of Phoenix' survey can request one from Joe Fazzino. -FWR

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