'Every retirement situation is unique … it's a full-contact sport with clients'

Earlier this year, Daryl Diamond got to the finish line of a multi-year succession process for his Winnipeg-based retirement income planning practice, Diamond Retirement Planning. With the keys turned over to a qualified and trusted successor, it seemed the veteran financial advisor was finally ready to ride off into the sunset.

“You would think that someone who was retiring from 35 years of work would want to then just sit back and maybe do something else,” Diamond says.

“But when I saw what Dynamic Funds were doing with their Retirement Income Centre, I was enthused and curious … it aligned with so many of the things we’d been working on at my former practice, both strategically and in terms of implementation of investment solutions.”

Un-retiring to fix retirement planning

Last September, Dynamic launched its Retirement Income Centre (RIC) with an audacious goal: to help a growing cohort of Canadian retirees face the challenge of building consistent and sustainable cash flow for their desired retirement lifestyle. With more than one in five Canadians today close to retirement age, according to Statistics Canada, it’s not just a matter of importance but also one of growing urgency.

“Over the last 25 to 35 years, we had the opportunity to work more and more with Dynamic to provide investment solutions to our retired and retiring clients,” Diamond says. “In my opinion, they have been among the leaders in providing support and educational materials to advisors helping clients navigate a critical time in their lives.”

After seeing what Dynamic had put in place for the RIC and the direction it was planning to go, he immediately saw an opportunity to make a difference. Having been a consultant to organizations of various stripes over the last 20 years, he wasn’t shy to offer up his expertise to help the program. In May, he was officially appointed as the firm’s chief retirement income strategist.

“In every other consulting relationship I had, the organization or the dealership contacted me,” Diamond says. “But in this situation, I contacted Dynamic … I wanted to be part of this, and I knew there was a lot I could add to what they were envisioning.”

A blue ocean in the growing grey market

Even after decades spent evangelizing the good work of retirement income planning, Diamond sees it as a very underserved space within the financial planning matrix. He says consumers today don’t truly understand how essential it is to be working with a professional at this critical inflection point in their wealth journey. On the industry side, he sees too few advisors choosing to focus their attention on other areas of financial planning.

“There still seems to be some weird mystique around the retirement income planning space,” Diamond observes. “We’ve heard a lot of advisors say ‘that’s a very labour-intensive market to work with,’ which is correct. And they might question the wisdom of working in a space where people are taking money out – which is odd to me, because it assumes you can’t get a rate of return by making the right investments.

“But it’s an intriguing market, because every retirement situation is unique … it’s a full-contact sport with clients. Things are always changing in the retirement space, and it lets you build some phenomenal relationships,” Diamond says. “Maybe the work/reward balance isn’t attractive enough in the minds of some advisors, but for others who recognize the opportunity, that just means there’s more assets for the taking.”

To be sure, things have changed significantly since Diamond first had the opportunity to put together a formal retirement income plan for a client more than three decades ago. At the time, he recalls most people were in a form of defined-benefit pension plan, compared to the landscape today where money purchase plans or group RRSPs are more the norm. He cites a recent statistic reported by the Toronto Star, which estimates only 40% of Canadians are in formal pension plans.

“It creates a big complication for both the consumer and the advisor,” he says. “It means upon retirement, the consumer will be looking at a big chunk of money – for some, the largest accumulation of wealth they’ll see in their lifetime – and it’s not going to translate automatically into an income stream. There’s a lot more work in structuring the income and designing an investment portfolio around it.”

Wanted: more retirement-focused advisors

Having a lump sum of wealth to manage can be a double-edged sword, Diamond says: it creates the flexibility for clients to make good and opportunistic purchases in retirement, but also opens the door to potentially disastrous and self-harming financial decisions.

The good news, he says, is that planning software today is leagues above where it used to be in terms of sophistication, which means advisors focused on retirement income planning today have the capability to do it more quickly and accurately than the generations before them.

“I think we desperately need more advisors to focus on this area of retirement income, and the pre-retirement positioning that ideally goes along with it. So many people in our business know how to flip an RRSP into a RRIF, but there are so many other moving parts impacting the ultimate outcome that advisors need to be aware of,” Diamond says.

“That’s going to require further education for the advisor, which is why Dynamic’s RIC was formed. … It’s a drum I’ve been beating for the last 15 years, and there’s still a flashing green light of opportunity for advisors who want to dedicate themselves to this.”