Financial institutions are on the cusp of a multi-trillion-dollar opportunity to gain assets by providing efficient and effective retirement income planning services for the growing percentage of the population in or near retirement.
New research from TowerGroup predicts that the challenges inherent in retirement income planning and asset decumulation will soon prompt many U.S. households to consolidate assets with a single advisor. The opportunity for financial services institutions to gain or lose assets is significant.
Retirement assets in various plan types under the control of individual investors in the United States total US$9 trillion, with business liquidation over the next decade potentially resulting in another US$10 trillion in assets. Yet the retiree market is far from monolithic as regards to income planning.
TowerGroup’s research underscores the importance of defining both the unique requirements and opportunities of each of the three major segments:
- he mass market, the largest by far in terms of number of households, will focus on asset protection and shifting assets into vehicles that generate income with manageable risk to principal;
- the affluent market, households with investable assets of US$200,000 to US$2.5 million, will be interested in structured asset drawdown strategies balanced with a personal risk management program; and
the high-net-worth segment will look for programs that blend and balance lifestyle and legacy.