FRC Gauges Use of Lifecycle Funds, Services

Financial Research Corporation (FRC) of Boston has examined whether investors favor the new or prefer the past. Its recent study “Evolution of the Solution: Investor Perceptions of Solution-Oriented Products and Services” found that the larger the percentage of total investment assets held in employer-sponsored retirement plans, the more interested investors are in solutions such as lifecycle funds. And the larger the percentage of assets held in personal accounts, including IRAs and taxable investment accounts, the more likely investors are to use the services of an advisor.

“Solution-oriented products and services are beginning to influence the way investors think about investing,” says Michael Evans, president of FRC. “Those firms that identify their most promising target markets and design their product and service solutions to appeal to those groups will emerge with a competitive advantage.”

In terms of demographic findings, the FRC research shows that youngest investors (30-40) are more likely to be motivated by fear or anxiety about their financial futures, while the oldest investors (70-plus) are most likely to be motivated by a sense of opportunity.