New research from the Investment Management ConsultantsAssociation finds that 92% of financial advisers' clients are 40 orolder.

According to U.S. Census data, nearly 17% of the U.S. populationwill be age 65 or older by 2020, and more than half will be age 45or older by 2060.

“The conversation in the financial advisory community must focuson retirement planning,” IMCA stated.

The second-quarter 2016 IMCA Research Quarterly, Challenges Facing the Next Wave of Retirees, examinesa range of retirement factors, including age demographics, advisorretirement trends, and 401(k) participants' attitudes about theirretirement readiness.

Every year since 2008, IMCA has distributed a survey link to itsmore than 1,000 members, and each year several hundred membersrespond, which offers a representative sample of the investmentadviser, broker-dealer and institutional consultant membership ofIMCA.

“Those nearing retirement are feeling the effects of havingwaited too long to begin saving and of having implemented afinancial plan too late, if at all,” the report states. “Thefinancial crisis of 2008 destroyed much of the wealth theyaccumulated and left little time to recover it … Given theseheadwinds, it is not a stretch to conclude that, for the next waveof retirees, the transition to retirement will be a bumpyride.”

In its report, IMCA addresses several specific challenges thatfuture retirees and their advisors will face. Here are five ofthose challenges:

1. DelayedPlanning

Through its research, IMCA finds that most households fail tomake retirement planning a priority until the critical wealthaccumulation years have passed.

Among the 30- to 39-year-olds, just 12% consider planning forretirement one of their greatest concerns, according to IMCA'sfindings. This increases to 23% among 40- to 49-year-olds and 25%among 50- to 59-year-olds.

Younger households focus more on immediate needs includinghousehold cash flow, current market conditions and currentexpenses, according to IMCA. Meanwhile, the older the household,the more the focus shifts from short-term needs to long-termplanning, including preserving wealth and planning forretirement.

“If young households continue to ignore the importance of wealthaccumulation and retirement planning until they reach their 40s,their chances of outliving retirement savings will continue togrow,” the report states.

Retirement savings are probably the most important source ofincome for future retirees, thanks to the increasing uncertainty ofSocial Security benefits along with the declining use of definedbenefit plans.

“Investors would do well to get serious about saving forretirement early when the number of years to compound growth isstill abundant,” the report states.

2. PlayingCatch-Up

Almost 70% of 401(k) participants age 60 to 69 believe they arebehind in saving for retirement, and the majority of that groupfelt more than slightly behind, IMCA finds.

Meanwhile only 15% of 40- to 49-year-olds believe they areon track saving for retirement, and just 25% of participantsnearing retirement (ages 50 to 59) felt that they were on the rightcourse to meet their financial needs in retirement.

“Reversing this trend will require advisors and clients toattribute much more urgency to long-term retirement planning,”according to IMCA.

3. LackingFormal Retirement Income Plans

IMCA found, on average, half of households across age range andadviser channel have a formal plan that outlines a specific incomestream in retirement. This means that close to half of householdsdo not have a formal retirement income plan, which according toIMCA “illustrates the lack of focus on important long-termgoals.”

“Too little, too late is becoming an overarching theme as lackof planning for retirement manifests itself in lack of preparednessfor funding living expenses in retirement,” the report states.“Advisers would do well to embark on or revisit their financialplans with their clients, because each new generation demonstratesa greater tendency to focus on short-term needs rather thanlong-term goals.”

4. A ShrinkingAdviser Pool

The average adviser age is 50-years old, and 36% of advisersplan to retire within the next 14 years, IMCA finds. Within thenext nine years, nearly one-fifth (17%) of advisors plan toretire.

“A scenario in which large waves of clients begin to retire andtheir advisers follow suit is not unrealistic, and it adds to thecomplexity of executing a successful retirement drawdown plan,” thereport states.

This could be especially risky for clients who are in the latewealth accumulation or pre-retirement planning stage because theycannot afford to make large investment mistakes.

“Transitioning to a new advisor is a tall order for clientsalready playing catch-up on retirement saving and planning,”according to IMCA. “It may be prudent for both advisers and clientsalike to think about this transition well in advance of itsactuality due to the lengthy list of administrative and emotionalhurdles that it necessitates.”

5. DelayedSuccession Planning Among Advisers

Among the group of advisers planning to retire in the next fiveyears, IMCA finds that 39% have hired or groomed an adviser toeventually lead their practices.

“As advisers retire in larger numbers, the potential for moneymovement between firms is greater when a successor has not beenidentified,” according to IMCA.

While finding a buyer may not be a top concern right now foradvisers, IMCA finds that 45% of advisors nearing retirementidentify transitioning their clients to a successor as a majorconcern.