It has not been a lot of fun being an advisor or an investor in the current environment. It has been downright frustrating and even a little scary. But from speaking with advisors and investors, I have detected a very encouraging kernel of optimism underneath that fear and concern.

Perhaps it is our nature as Americans, but even as we struggle with some of the fundamental economic issues that we need to tackle as a country, we see rays of hope and opportunity.

Where does that come from? It springs from the recognition that the future growth of our economy will be a direct function of our ability to invent and innovate. And creating new opportunity through solving problems will enhance productivity and fuel growth.

Having spent a good deal of time over the last few years speaking with market participants around the retirement income marketplace, I am pleased to report there is a tremendous amount of innovation underway with even more to come.

These innovations will help you, the advisor, do the following:

1. become more efficient and effective in managing your practice;
2. produce better after-tax returns for your clients as they accumulate assets and as you advise them on how to decumulate assets in a tax-efficient manner; and
3. as you are able to be more successful with the first two points, you will garner more assets, grow your practice and, perhaps just as important, better protect your clients as well.

In past columns, I have discussed product developments that provide guaranteed or more predictable income. There has also been a great deal of innovation regarding the tax-smart accumulation of assets through managed money programs such as mutual fund wraps and unified managed accounts. And while I won't go into the many further innovations in the managed money development pipeline, you should know that more improvements are on the way.

In this column, we will focus on a breakthrough that will change how business is done in the income distribution phase of retirement. Two companies with two different business models—Placemark Investments and LifeYield—have developed the capability to produce better after-tax income from a variety of portfolios when in the retirement income mode.

Placemark and LifeYield do this by capturing information on a household of accounts, whether taxable or tax-deferred. These programs then determine which securities to sell across a number of registrations, which are often called a unified managed household, and in what sequence, to produce higher net after-tax income.

According to LifeYield's research, over the course of an investor's retirement lifetime, 30% higher income can be produced by virtue of harvesting securities, such as individual securities, mutual funds, separate accounts and annuities, from a variety of portfolios and doing it in a tax-smart way.

All this can be accomplished while maintaining the client's preferred asset allocation strategy. This approach is also capable, the research indicates, of producing upward of 50% higher assets to bequeath at the time of death.

This kind of capability is an important advancement, especially in light of the trend toward wealth advisors taking a holistic view of the family or "household" financial situation and providing fully integrated investment management services through a unified managed household approach.

The process can be daunting: first, recognizing and accounting for the tax liabilities of investor households, including ordinary income tax and capital-gains tax exposure; then, optimizing trading activity for households that own both taxable and tax-deferred accounts, such as Individual Retirement Accounts.

To add a further challenge to the mix, there is the IRS Minimum Required Distributions that must be considered. These new solutions address all of these issues systematically and efficiently.

Determining how best to draw downfrom a number of household accounts is complex, confusing and time-consuming. LifeYield's research indicates that advisors can spend between one hour and three hours per month creating their own spreadsheets to determine how best to draw income from a variety of portfolios.

And not only is that type of work complex, it's also prone to human error or misinterpretation.

Newly developed income optimization solutions are designed to save time and increase accuracy and productivity so you can spend more time with your clients. Meanwhile, they also protect you from client misunderstandings over the course of a retirement lifetime.

Perhaps most important to the health of your business, these solutions can be used as a marketing tool to offer a distinctive and differentiated capability to produce better client results and thus give you an opportunity to garner more assets.