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Income Strategies Are Evolving — Are You Keeping Up?
Plus, the latest in market news.
Happy Sunday, and welcome to Benzinga’s financial advisor newsletter.
Today we're talking about retirement — specifically income planning. With more clients crossing the retirement threshold, the pressure is on to turn investments into income that lasts. A new survey reveals how advisors are evolving with some eye-opening shifts. Read on to see what’s changing, and why now.
Plus, a look back at the last week of market activity.
Table of Contents
INDUSTRY CHATTER
With many clients nearing or at retirement, income allocation isn’t about chasing yield — it’s about making sure the bills get paid.
That’s one of the main takeaways from Nasdaq’s latest Income Allocation Survey — and it marks a subtle but important shift in how advisors are approaching income strategies.
Yes, income remains a core part of the portfolio (holding steady at 29% of overall allocation). But the purpose of that income is evolving. Fewer advisors are optimizing strictly for total return. Instead, a growing share — now 32% — are focused on paycheck replacement. That’s not just semantics. It’s a signal.
Retirement isn’t a dream for many clients anymore. It’s here, or right around the corner. And that means the conversation and questions around income needs to be talked about.
For example, will clients be able to cover their mortgage and healthcare costs, and will travel or helping family members be part of the budget?
In short: Clients don’t want an income strategy. They want income they can count on.
What Advisors Are Doing Differently
Interestingly, while the overall allocation hasn’t changed much, the tools advisors are using to build income have.
The survey found that usage of cash and cash alternatives rose 12%, passive ETFs increased 11%, and active mutual funds climbed 9% compared to two years ago. That mix suggests advisors are prioritizing liquidity, flexibility, and a blend of both passive and active management — depending on client needs. The one-size-fits-all approach is officially out.
At the same time, the risks clients are worried about the most over the next 12 months is inflation (44%), market volatility (34%), and interest rate changes (33%).
And yet, most portfolios aren’t being radically reshaped as time goes on. Tools like options-based strategies, which could address some of these risks, remain underused — often because they’re harder to explain, and harder for clients to understand and feel confident doing so.
That’s where advisors come in to lead.
The Takeaway
Clients, especially Gen X and Boomers, are shifting from “How much can I grow?” to “How do I live off what I’ve built?” And that changes everything.
The advisor value isn’t just in choosing the right mix of ETFs or funds, it’s connecting the dots between a portfolio and a predictable lifestyle.
At the end of the day, income planning isn’t just math. It’s mindset. And as tools evolve and client needs grow more complex, your ability to explain, personalize, and guide is what truly sets you apart.
And for those in or nearing retirement, the most valuable thing you can offer isn’t a product — it’s peace of mind.
WEEKLY MARKET RECAP
The U.S. economy closed the second quarter with a final GDP growth rate of 3.8% — its strongest performance since the third quarter of 2023 and above the long-term average pace.
That's a sharp rebound from the 0.5% contraction in the first quarter, when fears over looming tariffs rattled businesses. Still, the acceleration in growth stands somewhat at odds with the softer labor market data seen over the summer.
Speaking in Rhode Island, Federal Reserve Chair Jerome Powell said that signs of labor market weakness had pushed policymakers to shift their balance of risks in a way that justified a rate cut last week.
On inflation, Powell noted that the impact of tariffs has so far remained at the lower end of expectations and could prove temporary. He emphasized that there is no preset path for future rate decisions, underscoring the Fed's challenge of balancing persistent inflation risks against a cooling job market.
Powell also described equity valuations as "fairly highly valued." His remarks sparked a modest pullback on Wall Street, with major indexes easing slightly over the course of the week.
Fresh data on Thursday and Friday revealed jobless claims far under expectations, suggesting that layoffs remain limited and the labor market is holding firm despite Fed worries.
Inflation, meanwhile, ticked higher in August, with the Personal Consumption Expenditures index rising from 2.6% to 2.7% year-over-year and 0.3% month-over-month. Core PCE, the Fed's preferred measure, increased 0.2% on the month and held at 2.9% annually.
The University of Michigan's latest consumer sentiment survey painted a weaker picture, showing confidence falling for a second straight month to its lowest since May.
"Consumers continue to express frustration over the persistence of high prices, with 44% spontaneously mentioning that high prices are eroding their personal finances, the highest reading in a year," said Joanne Hsu, director at the University of Michigan's Surveys of Consumers.
In the commodities market, gold and silver extended their powerful rallies. Gold – as tracked by SPDR Gold Shares (GLD) — hit a fresh record of $3,800 per ounce and is now up 43% year-to-date, its strongest run since 1979.
Silver — tracked by the iShares Silver Trust (SLV) — gained 15% in September alone, climbing above $46 per ounce — the highest level since May 2011.
THE WEEK AHEAD
Economic Data
Monday: Pending home sales, Fed Speeches (Waller, Hammack, Bostic)
Tuesday: Job openings, consumer confidence, Case-Shiller home price index
Wednesday: Manufacturing PMI, construction spending, auto sales
Thursday: Initial jobless claims, factory orders
Friday: U.S. unemployment, hourly wages, ISM services
Earnings
Click here for the full calendar of economic data and earnings reports.
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