According to Cerulli’s report titled “The State of the Rollover and Retirement Income Markets: Sizing, Segmentation, and Addressability 2011,” RIO households include those ages 55 to 69 who are either about to retire or recently retired. Cerulli estimates there were 26 million households in this group in 2010.
Those ages 55 to 59 maintain the highest percentage of retirement accounts at 46% of investable assets. Just more than one-third of this group’s investable assets are in direct-held mutual funds, stocks and bonds, Cerulli found.
“Retirement accounts that have been viewed primarily as savings accounts suddenly enter new phases of income generation as people age, and depending on their wealth level,” said Alessandra Hobler, analyst in Cerulli’s retirement practice. “We recognize that knowing the size and location of investor assets does not necessarily translate into money in motion toward retirement income solutions, but it’s a strong gauge. Firms can use this analysis to identify their opportunity and develop relevant strategies.”
Other findings from the report include:
- Just less than one-third of investors do not think they need advice regarding retirement income, and another third have not taken the time to plan.
- Eighty percent of firms in the marketplace have launched within the past year or have existing products geared toward generating retirement income.
- The majority of retirement income product providers believe that equity-growth-oriented portfolios combined with income floor guarantees are the center of their strategy and production on retirement income products.
- Sixty percent of providers said the distribution of retirement income products is mainly through unaffiliated retail advisers.
- Forty percent of providers view direct-to-consumer as their primary channel for distributing income products, but Cerulli’s research found that the direct channel is growing more quickly and is bigger than previously thought.
The report is available for purchase by contacting CAmarketing@cerulli.com.