Say what you will about baby boomers being undersaved for retirement: They've still got an estimated $8.7 trillion tied up in retirement savings plans, and banks and brokerages want their business. To that end, several firms have redoubled their efforts, promising free one-on-one consultations, rebates and discounts on services, and highly-produced online education. But critics aren't swayed, and they say would-be retirees should be cautious: Free, they warn, can be a code word for "sales pitch."
Just this year, financial companies have unveiled a slew of new, free retirement-planning offerings. On January 31, AARP and Charles Schwab announced that AARP members can now get a free consultation with a Schwab adviser, free seminars and, if they move their investments to Schwab, a rebate on advisory fees. The same week, Fidelity said it would host 200 free seminars across the country this year to focus on retirement income strategies, a series of webcasts and free one-on-one consultations included. And Bank of America/Merrill Lynch is planning at least 2,000 retirement-planning and financial seminars in 2011 and a least two webcasts—free.
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Conference room investing seminars and free consultations aren't new, but the focus of these efforts is, says Keith Weber, CFP, founder of Weber Consulting, which trains financial advisors. The new campaigns increasingly zero in on retirement income strategies – how to tap retirement assets over time, without running out. And boomers freely admit they want the advice. Just 10% of Americans over 50 say they feel prepared for planning and saving for retirement, according to a December 2010 Schwab study, and nearly four out of five Americans wish their employers would offer more advice to help them manage their retirement plans, according to a 2010 Wells Fargo survey. "The sheer number of baby boomers is a big impetus for offering free advice now," says Nick Barnwell, a CFP for Weiser Capital Management.
For the companies, the effort may not be exclusively altruistic. Advisories are betting that a free offer or service now translates into paying clients down the road, says Art Koff, founder of RetiredBrains.com, a financial and employment resource website for retirees. Schwab, for example, is offering discounts: AARP members who sign on to have their portfolio managed by firm will get a one-time rebate, which effectively waives the first year's program fee, depending on their portfolio's value. A portfolio with $100,000 would garner a $500 rebate ( annual program fees range from .5%-to-.25%). AARP also makes money from the partnership, getting a one-time royalty fee from Schwab for use of its name, logo and mailing list .
The firms insist financial motives don't drive these freebies. Bank of America's head of retirement planning solutions, David Tyrie, says they are "not trying to pitch" at their seminars, and Fidelity's Beth McHugh, vice president of market insights for the firm, says there's "no 'sign here'" pressure. Schwab financial consultant Casey Mervine says "there's no hard close" and an AARP spokesman says that the free consultations are just that—without any profit for the group: Schwab's offerings "complement AARP's longstanding work to help our members make informed financial decisions about their retirement."
And as long as you realize the drawbacks, experts say these seminars, consultations and webcasts are often worth your time, at least as an introduction. With that in mind, here's what to watch for:
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