Three-quarters of financial service firms rate the acquisition of new clients who are building a nest egg for retirement as a very or vitally important strategic priority, a new survey shows.
Market research firm Hearts & Wallets LLC published this finding in a new report that highlights findings from the firm’s annual confidential management survey of nearly two dozen distributors, employer-sponsored plans, insurers, asset managers and intermediary platform solution providers regarding their strategic priorities.
The survey lists the following as very or vitally important strategic priorities among the firms surveyed:
- Acquisition of new clients — 75 percent of respondents;
- Marketing/developing retirement income products and services — 70 percent;
- Driving IRA rollover sales — 55 percent;
- Winning pre-retirement asset consolidation from existing customers — 65 percent;
- Building/improving wealth management offerings — 40 percent;
- Helping mid-career investors accumulate wealth — 30 percent; and
- Working with young investors to pilot new communications technologies — 25 percent.
The survey reports rising interest among respondents in serving young investors. The percentage of firms agreeing that “most of our competitors are not interested in target accumulators” dipped to 10 percent this year from 56 percent in 2010.
Similarly, firms agreeing that “it is more profitable to serve customers living in retirement and generating income from assets than accumulators” declined to 20 percent from 37 percent in 2010.
Hearts & Wallets defines accumulators as mid- and late-career investors, ages 28 to 64, who do not consider themselves pre-retirees. They represent about half of U.S. household investable assets.
Interest in serving young investors is rising, which is putting participating firms under pressure to maintain older investor focus. Only 16 percent of resources (budgets, headcount and management) are devoted to young investors; and 8 percent of firms offer a dedicated young investor focus similar to retirement income. The report notes, however, that firms are adopting tools that appeal to younger investors.
Nearly 60 percent of brokerage firms and 60 percent of retirement providers, but only 30 percent of asset managers, are working on “tools that let investors check the quality of products or advice.” Additionally, 40 percent of firms say social media already helps branding and acquisition.
Also, the firms are shifting resources from traditional media to webinars, social media and messaging technologies.