Affluent Most In-Demand for Retirement Income Services

TowerGroup says advisers should use a “holistic″ approach to tap the lucrative market of providing retirement income services to affluent investors.

In the report Wrestling with Retirement Income: Key Challenges and Solutions for the Wealth Management Industry, TowerGroup says financial institutions are pouring plenty of money and resources into retirement income planning. Yet many firms are struggling to launch an effective program, particularly to target the affluent and “emerging affluent” segments, which TowerGroup predicts to be the most profitable.

TowerGroup said in a release that through 2011, the largest opportunity for retirement income services is in the affluent segment (here defined as $500,000 to $1.5 million in investable assets) and the emerging affluent segment ($250,000 to $500,000 in investable assets). Clients in these markets have enough assets to need careful planning and ongoing management, but are not immune to the risks of running out of retirement savings.

TowerGroup suggests advisers look at the whole picture and incorporate the smart use of technology in order to help clients effectively manage their retirement income. The report gives the following tips:

  • Purge the divisions in your organization causing product and service silos.
  • Focus on holistic advice and planning in order to offer more than strictly a product solution.
  • Use well-trained personnel to retain tax-advantaged accounts.
  • Apply expert teams and alliance programs to rethink service models.
  • Work toward using asset-based and non-traditional fee arrangements as part of the revenue and compensation strategy.
  • Invest in technology to improve advice, maximize the use of client data, manage complex revenue arrangements, and streamline regulatory licensing and training.







See also: Finding the Right Vehicle, Affluent Boomers Express Top Retirement Concerns, Affluent Boomers Look Outside the Plan