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Hearts & Wallets: Freedom Rings

By Staff Writer

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The idea of “financial independence” may work better than the idea of “surviving” at motivating affluent baby boomers to save.

Chris Brown and Laura Varas, the partners who run Hearts & Wallets L.L.C., Hingham, Mass., a market research firm, have published that conclusion in a summary of results from focus group sessions with U.S. investors ages 40 to 60 who have a minimum of $100,000 in assets. Most of the investors had $250,000 to $1 million in assets.

Financial services providers tend to focus on retirement needs, and their advisors also focus almost entirely on retirement planning, the Hearts & Wallets researchers say.

The researchers say providers and advisors who serve the affluent need to change their focus.

“Many investors don’t plan to retire,” Varas says in a comment on the focus group results. “Affluent Accumulators told us they are saving for ‘freedom money.’ This is a polite version of the term they used to describe the pot of money that will let them walk off the job if someone treats them unreasonably, or if they simply get sick of that job and want to do something else.”

Advisors’ current emphasis on retirement planning leaves those affluent consumers feeling misunderstood, Varas says.

- Warren S. Hersch

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