Financial Advisors' Role in Influencing Social Security Claiming

Abstract

For millions of Americans, financial advisors are a trusted source of financial and retirement preparation information. This includes providing advice and information on Social Security benefits, a critical component of most Americans’ retirement finances. To gain greater insight into what financial advisors say to their clients about Social Security, an online survey of over 400 professional financial advisors was conducted in the Spring of 2011. The results reveal that a majority of advisors believe that they are responsible for educating their clients on the role Social Security will play in their retirement income. Moreover, advisors have the ability to influence their clients’ decisions about when to claim their Social Security retirement benefits. Three-quarters advise the majority of their clients on when to claim. In addition, the study finds that the Social Security Administration (SSA) is the leading and preferred source of information and education for financial advisors and their clients. Over half of advisors say it is a major source of Social Security-related information, more than any other source. However, advisors are critical of the job SSA does in educating advisors and the public, and are interested in additional resources from the Agency. Financial advisors also indicate that the financial services companies they work with could improve their communication and education efforts as it relates to Social Security. The research findings uncover a need for improved methods of educating and disseminating information to financial advisors and the public on Social Security.