Boomers Drive Software Development For Retirement And Estate Planning

As the Baby Boom generation continues to age, the ripple effect of their sheer numbers has been felt in many business and consumer areas.

Now the wave has reached those who build retirement and estate-planning software, and the effect, several vendors say, has been and will continue to be significant.

According to Carol Smith, U.S. business strategist for Solcorp, the driving force behind changes in such software has been boomers independent nature and demanding expectations.

“Boomers like self-direction, and they dont like being told what to do,” explains Smith, who is based in the companys Chicago office. “They like to create their own destiny. Theyre not risk averse to technology, so they dont mind using self-service to the extent it makes sense.”

Because they are aware of Enron and other financial disasters, boomers also understand the need for financial diversification, says Smith. “What we see as a vendor is that opportunities for diversification have caused the industry to create hybrid products.” For example, annuities now tend to feature “enhanced death benefit options,” which makes them “look more like life insurance,” she notes.

As a result, says Smith, “we have to have total flexibility in product design so we can pull features from different products and combine them for the product du jour.”

The walls that previously distinguished various kinds of insurance protection are down, says Smith, and insurers need to recognize that in their product design.

This trend has caused software makers to “reconsider how we set up product profiles within the software,” she notes. “We no longer make the same assumptions about how products will behave. Boomers need diversified products and the ability to combine features.”

Smith emphasizes that software built to serve the boomers must be Web-enabled, which allows consumers to make inquiries and changes on a self-service basis. In addition, Web-enabled applications need advanced security, especially for operations like making changes to an annuity contract.

Todays software must provide such flexibility and security to both consumers and brokers, says Smith. Solcorp makes a home-office enterprise administration system that handles life insurance and annuities.

According to Robert B. Ritter Jr., chairman and CEO of San Ramon, Calif.-based InsMark, the boomer phenomenon “has affected the way we design products.”

He points out that boomers require “far less emphasis on estate planning than on retirement needs.” As a result, while the company offers both kinds of products, the core module designed for boomers will be its Retirement Needs Analysis (RNA) product.

“I dont know that we would have had the emphasis on RNA if not for this population boom coming along,” Ritter comments.

Software changes at InsMark motivated by the boomer wave include a series of calculators that project both income and the taxes a boomer will pay at retirement, says Ritter. The software also considers assets like CDs and bonds, and can account for current needs, such as long term care insurance.

Coss Development Corporation, Milwaukee, Wis., recently introduced WealthScape, a Web-based point-of-sale software that “recognizes the growing demographics of aging baby boomers and projects a clients assets with planned distributions up to the clients age of 120.”

Tax implications of investment alternatives are then compared and analyzed, says Coss. “By evaluating the effects of repositioned assets and adjustments to changing assumptions on their net worth and retirement incomes, clients can make financial decisions today that will critically affect their future.”

According to Coss, a registered representative does not need to install, download or configure the software. The application is “an entirely Web-based service.”


Reproduced from National Underwriter Life & Health/Financial Services Edition, August 25, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.