As more Americans approach or enter retirement, investor priorities are undergoing a fundamental shift. Growth remains important. But for the next generation of retirees, the focus is shifting increasingly to capital preservation and generating a reliable income to support their lifestyle.
Recent equity market volatility has accelerated this shift, prompting many investors to reassess their asset allocations. Against this backdrop, fixed income has reemerged as a critical component of a balanced portfolio. However, not all fixed-income strategies are created equal.
Amid this evolving landscape, individual bonds are experiencing a resurgence — for good reason. They offer key advantages such as principal protection, predictable income and the ability to tailor portfolios to individual client needs.
Yet, despite these benefits, many advisors have gravitated toward more convenient fixed-income vehicles, such as mutual funds, exchange-traded funds and separately managed accounts. While these options can be efficient, they often sacrifice the transparency, control and customization that individual bonds provide.
Now is an opportune moment for advisors to revisit individual bonds — not only for the potential value they deliver to clients but also to differentiate their practice in a competitive market.
Historically, using individual bonds has presented hurdles for independent advisors. Many have faced limited platform capabilities, operational complexities and lack of support in this area. But that is changing.
Outsourced trading services are now more common, helping to remove barriers and giving advisors direct access to institutional traders, making the use of individual bonds an easy and effective addition to their practice, regardless of client size or overall investable assets.
Individual Bonds For A New Retirement Landscape
The next generation of retirees is entering a market filled with uncertainty — from fluctuating equity valuations to unpredictable monetary policy. In this environment, fixed income isn’t only a portfolio stabilizer — it’s a foundation. Individual bonds, especially when structured into ladders, offer a clear advantage: reliable returns, predictable cash flows and enhanced optionality.
In this environment, fixed income isn’t only a portfolio stabilizer — it’s a foundation.
Ladders built with individual securities offer yield certainty at the time of purchase for each bond, providing stability and predictability throughout the investment horizon. As each bond matures, it creates a built-in opportunity to reassess and take action based on the client’s evolving goals.
Indeed, investors have options for how to use the proceeds. They can use them for retirement income, reinvest them in the back end of the ladder to extend and potentially enhance future cash flows, or allocate them to other asset classes — such as equities — if market conditions are favorable.
This built-in flexibility gives both advisors and clients the control to adapt the strategy over time, making bond ladders a dynamic and responsive component of a long-term financial plan. The bottom line is that individual bonds provide clarity: the security you buy is the return you’ll get if held to maturity.
Importantly, bond ladders can be customized for each client — matching cash flow to retirement needs, accounting for risk tolerance, and incorporating tax and estate planning considerations. While individual bonds may not suit every investor, they are especially powerful tools for high net worth clients who are nearing or in retirement.
A Sophisticated Solution To Differentiate Your Practice
Today’s advisors face mounting pressure from fee compression, digital disruption and growing client expectations for personalized service. Standing out in this competitive landscape requires more than traditional investment models — it demands strategies that deliver both value and distinction.
A 2024 study by State Street Global Advisors highlights this shift: Nearly two-thirds of U.S. investors seek more personalized advice, while approximately 84% of advisors agree that tax personalization enhances the value of a portfolio. Custom individual bond portfolios directly address these needs.
Offering tailored bond portfolios signals a higher level of expertise and attention to detail.
Offering tailored bond portfolios signals a higher level of expertise and attention to detail — qualities that high net worth clients increasingly expect. Unlike off-the-shelf mutual funds or ETFs, individual bonds provide transparency, predictable cash flow and the opportunity for tax-efficient strategies that clients can’t easily replicate on their own.
Simply placing client assets in a bond fund doesn’t convey the same strategic intent. Designing a custom bond ladder, on the other hand, demonstrates a thoughtful, value-added approach that enhances your client relationships and reinforces your fee structure.
If you’re not offering — or at least discussing — individual bonds, you may be leaving an opening for another advisor to step in and deliver a more personalized solution. In an era when personalization and stability are paramount, individual bonds are more relevant than ever. Advisors who embrace them can provide more tailored solutions — and stand out as true stewards of client wealth.
Michael S. Gregson and John Morneau serve as Co-Heads of Outsourced Trading at Oppenheimer & Co.
