Industry Execs Look At Winning The Retirement Market

Wachovia classifies customers by their wealth and directs them to advisory services suited to their financial situation, he explained.

Emerging affluent customers with over $100,000 in annual income and $100,000 to $250,000 in investable assets are directed to Wachovia’s financial centers, where specialists assist them in getting into retirement shape, he said.

Affluent investors, with $250,000+ to $2 million in assets, are assigned to certified financial advisors in the bank’s Wachovia Securities division. Richer clients are handled by the bank’s wealth management division, Reid explained.

Face-to-face contact is vital if an advisor wishes to establish a long-term relationship with a client, he said. An advisor who makes a connection early in the customer’s working life is in a strong position to capture that individual’s retirement dollars later, he added.

“Our research shows that it takes 7 years on average to develop a trusting relationship with an advisor,” Reid said.

Wachovia found over 60% of people who change jobs and more than 66% of retirees invest their rollover funds with a financial firm where they have an existing relationship, he said.

The middle market, constituting those with more than $100,000 assets per household, makes up about a third of the U.S. adult population and controls around 39% of U.S. retail assets, said another expert, Mark R. Thresher, president and chief operating officer of Nationwide Financial Services Inc., Columbus, Ohio.

Worksite distribution will be the key to reaching that market, Thresher said. Other economical methods of maintaining contact with these customers is through on-line advice and financial tools; providing prepackaged product mixes; selling directly, such as through the mail and Internet, rather than through investment professionals; and by offering simple products with clear pricing, he said.