Registered investments advisors (RIAs) are likely well acquainted with State Street Global Advisors (SSGA) due to the firm’s status as one of the largest custodial banks and one of the top three U.S. issuers of exchange traded funds.
In fact, SSGA pioneered the domestic ETF industry with the launch of the SPDR® S&P 500® ETF Trust (NYSEARCA:SPY) 30 years ago and the firm deserves credit for showing the industry the importance of branding. After all, SPDR is one of most recognizable marks in the space.
Important facts to be sure, but SSGA also offers advisors a rich lineup of assets and insights pertaining to retirement. That’s good news because chances are as an advisor, you’re already allocating plenty of time to helping clients plan for retirement.
Advisor looking to glean insight regarding how to navigate the SECURE Act 2.0, better understand and utilize target-date funds, navigate defined contribution (DC) plans and tackle issues such as longer life expectancies, SSGA is an ally for advisors working with larger number of clients nearing retirement and those already there.
Helping Clients Prepare for Longer Lifespans
Keeping in mind that this number is from 2020, meaning it could be skewed lower because of the coronavirus pandemic, the average U.S. expectancy was about 77.3 years. Stripping out the impact of COVID-19, U.S. life expectancy has only done one thing: Trend higher. In 1960, it was below 70 years.
That is to say some of the retirement strategies that worked in previous decades may not be as relevant today. Moreover, advisors need to spend more time helping clients financially prepare to live into their 80s and, perhaps, longer.
“As medical breakthroughs and healthier living extend lifespans, regular investors have to determine how to ensure their retirement assets create a steady post-retirement income that lasts a lifetime,” notes SSGA.
Target-date funds – one of SSGA’s core competencies at the product – can be vital additions to the advisor toolbox when it comes to helping clients thrive well past standard retirement age.
“Target date funds provide a dynamic mixture of growth, income and downside protection assets that shift over time as a participant nears retirement, providing a simple yet comprehensive investing path during the working years,” adds the asset manager. “Features such as automatic enrollment and savings escalation have also shifted investors’ default behaviors in ways that have improved participation rates and encouraged healthier levels of savings.”
SSGA Retirement Income Roadmap
Of course, bolstering effective retirement planning is easier said and some advisors struggle with starting points when it comes to sourcing retirement. Fortunately, SSGA provides that foundation with a highly useful retirement income roadmap.
That includes plan evaluation, goal-setting and strategies applicable to a broad base of clients, including younger workers. Other areas where SSGA can be of assistance to advisors on the retirement front include the integration of environmental, social and governance (ESG) principles into retirement portfolios and dealing geopolitical and macroeconomic issues – an area that’s of increasing concern to clients.
“Socioeconomic fears loom large in impacting retirement readiness and mirror the concerns people have around financial management in retirement,” observes the fund issuer. “Respondents also wrote in concerns surrounding inflation and being unable to enjoy retirement, given financial stressors. Reasonably, survey respondents in countries where people expect to live longest — Americans (26%) and Australians (24%) — were more concerned about outliving their savings.”
The point: Offering clients proper retirement assets and strategies is an endeavor made easier for advisors by selecting the right partner. State Street checks that box.
Related: Golden Retirement Planning Ideas, Insights with GSAM