Almost two-thirds of workers approaching retirement — particularly those in the middle and lower part of the income scale — will run short of funds after only 10 years in retirement, according to the Washington, D.C.-based Employee Benefit Research Institute.

Yet, it is this group of retirees who are generally underserved by financial advisors, who tend to focus on high net-worth clients. Clearly, though, many middle-class people need retirement planning help as well.

But according to a recent study released by the Illinois-based Society of Actuaries, it’s the attitudes of both middle-class savers and advisors that often prevent the two from working together successfully.

The SOA paper, entitled Barriers to Financial Advice for Non-Affluent Consumers, prepared by Dan Iannicola Jr., and Jonas Parker of the Washington, D.C.-based Financial Literacy Group for the SOA, describes the long list of hurdles that prevent middle-income investors from seeking out and profiting from professional financial advice.

Although this cohort’s responsibility for creating its own retirement has increased over the past few decades, its financial knowledge and planning has simply not kept pace. This is true among even the upper-middle class, the paper suggests.

Middle-income consumers — who will depend on their investments to fund a significant portion of their retirement standard of living — really don’t understand investing. They fail to appreciate the value of financial advice and generally view the financial services industry with suspicion.

Yet, because they lack substantial savings, they are at significant financial risk if they suffer a disability or a life-changing illness.

Adds the paper: “There is also a cultural disconnect between financial advisors, who are used to servicing wealthy clients, and non-affluent consumers from different cultural backgrounds.”

As many middle-income consumers don’t travel in the same social sphere as advisors and often face a variety of cultural and linguistic barriers, they frequently seek financial advice from informal sources, such as family and friends. They view these sources as inherently trustworthy.

And the financial services industry exacerbates this situation, the paper suggests. Too often, financial institutions either ignore the non-affluent market as being generally unprofitable or focus on selling its constituents products they may not be able to afford.

The result of this gap, the SOA paper maintains, is a greatly underserviced market that only adds to the ill will still harboured by many investors in the aftermath of the 2008-09 financial crisis. The SOA study’s findings should be of interest to advisors trying to expand their practices beyond the traditional focus on affluent clients, the paper suggests.

Those wishing to do so may want to review another recent SOA-sponsored report, entitled Segmenting the Middle Market: Retirement Risks and Solutions, which was prepared by Noel Ab-kemeier, a principal with a Seattle-based actuarial firm.

That report highlights a number of steps that advisors can take to help create effective retirement-income streams and provides multiple client examples — including several in which family worth would have to be described as “modest.” IE