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Portfolio > ETFs > Broad Market

Cerulli: Insurers May Give Masses Financial Advice

By Staff Writer

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NU Online News Service, March 10, 2004, 1:59 p.m. EST – Insurers are in a good position to sell financial advice to small investors, according to new report from Cerulli Associates Inc., Boston.[@@]

Analysts at Cerulli, a financial services research firm, note that U.S. residents with less than $100,000 in investable assets and $250,000 in net worth control only about 1% of total U.S. household investable assets.

“Mass market” investors may hold a total of as little as $130 billion in assets, and they are reluctant to pay ongoing fees for advice, the Cerulli analysts write.

In the past, fewer than one-third of mass market investors have risen into a higher wealth tier, the analysts warn.

But the analysts point out that mass market investors put more assets in insurance products than wealthier investors do and that some mass market investors make better than clients than others.

Married couples aged 30 to 45 that have children, own homes and control at least $50,000 in investable assets make up about 3% of the mass market investor population and often need professional advice to cope with life events, the analysts write.

Insurers and banks have an edge over other players in the mass-market advice market because insurers and banks already do business with small investors and often have data that they can use to identify the best prospects, the analysts conclude.

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