The fact that so many Americans are not adequately preparing forretirement has been widely documented. However, in consideringpotential solutions to meet this challenge, the role of insurancecompanies and other financial institutions, along with theirintermediaries, is often overlooked.

This is a big problem as well as a major opportunity forinsurance agents and brokers—many of whom supplement their propertyand casualty books of business with group life and health insurancesales via employee benefit plans. Some sell retirement-relatedproducts directly to individual consumers as well.

The financial services industry has certainly devotedconsiderable resources to this effort, spending billions to marketa growing number of products and services designed to addressretirement needs. Furthermore, there are thousands of professionalsof various stripes—financial planners, advisors, brokers andinsurance agents—ready, willing and able to help consumers puttogether a formal retirement savings and income plan.

So why have the industry's efforts to crack the code on theretirement market apparently fallen short, judging by the number ofpeople who feel unprepared financially? And what can the industrydo to more effectively reach and serve this growing segment offuture retirees?

To help the industry come to grips with this conundrum, theDeloitte Center for Financial Services conducted a survey amongnearly 4,500 consumers from a wide range of age and income groups.Our goal was to generate insights into how financial institutionsmight develop new approaches and solutions by better understandingthe attitudinal and behavioral constraints preventing consumersfrom taking more firm control of their retirement destiny.

We did a deep dive into the problems facing the majority ofrespondents—58 percent—who do not have a formal retirement savingsand income plan in place. This planning gap widened the further therespondent was from their expected retirement date—rising to 70percent among those who don't expect to leave the work force for 15years or more.

The survey found that planning for retirement makes a bigdifference in the confidence level of consumers, as respondentswith a formal plan to generate retirement savings and income werefour times more likely to feel very secure (52 percent) about theirretirement compared to those without a formal plan (only 13percent).

In addition, Deloitte's survey suggests that there is arelationship between the use of professional advisors and feelingsabout retirement security. Indeed, the survey found that 40 percentof those using financial advisors felt very secure about theirretirement, versus only 22 percent of those who do not seekprofessional advice. Meanwhile, 66 percent of respondents with afinancial advisor had a formal plan for retirement savings andincome, versus only 28 percent of those without an advisor.

The survey identified a number of reasons why inertia onretirement planning persists despite extensive efforts by insurersand annuity companies, as well as banks, mutual funds and brokeragefirms, to help consumers address this challenge and enhance theirretirement security.

Analysis of the survey data revealed five main barriersinhibiting many Americans from taking a more disciplined approachto setting retirement goals, and putting in place the requiredmechanisms to achieve a secure future. These interconnectedbarriers are:

1). Conflicting priorities: While retirement isa leading concern for a majority of the survey respondents, manycited difficulty balancing such long-term needs with other, oftenmore immediate financial priorities.

2). A failure to communicate: Financialinstitutions often do not effectively reach those who may needretirement planning advice and solutions, particularly via theworkplace. And even when they do, they don't necessarily addresssuch needs as part of a broader financial plan taking into accountother priorities.

3). A lack of product awareness: Manyconsumers are simply not familiar with a number of retirementproduct options at their disposal.

4). Mistrust in financial institutions andintermediaries: A significant number of individuals do nothave a high degree of trust in anyone working for the financialservices industry, whether in offering objective advice ordelivering on what they promise when it comes to filling aconsumer's retirement needs.

5). A “Do-It-Myself” mentality: A significantsegment of consumers either don't want, or feel they don't needprofessional advice in retirement planning. For many, this might bea short-sighted decision, given the complexity of retirementfinances, the lack of awareness about the product optionsavailable, and the potential value an advisor could offer.

Potentially, many of these barriers could be overcome byadopting a more holistic approach, in which retirement needs areaccounted for early in a customer's lifecycle and in conjunctionwith other financial priorities. Changing the mindset of bothconsumers and retirement services providers to encourage a moreintegrated planning discipline is a very important step inresolving the retirement dilemma.

But this is not the only step needed to make consumers feel moresecure about their retirement. There are other initiativesfinancial institutions and their intermediaries might consider tohelp them overcome the lack of trust and dearth of productfamiliarity among many consumers, while perhaps prompting more ofthose with a “do-it-myself” mentality to reconsider and seekprofessional advice.

In future columns over the course of the year, we'll moreclosely examine the barriers listed above, and suggest how theindustry's operating models and marketing approaches might need toevolve so that insurance agents and their carriers can moreeffectively reach and serve consumers in tackling their retirementneeds.

In the meantime, a full report on the survey results and theirimplications can be accessed with this link.