“On average, 10.8% of all households' financial assets are in cash equivalents at a bank,” Cerulli says.

Financial firms are targeting the $3.4 trillion held by U.S. investors in cash equivalents at banks, according to new research from Cerulli Associates.

“On average, 10.8% of all households’ financial assets are in cash equivalents at a bank,” states Scott Smith, director at Cerulli, in a statement. “This includes money market accounts, savings accounts or CDs.”

Cerulli finds many households accrue more cash equivalents than recommended.

“It is standard recommendation, although not always followed, for households to keep at least six months’ worth of expenses in a savings account for emergencies,” said Smith in a statement.

As Smith and Cerulli’s research suggests, now is the time to educate customers about the range of products available “outside of traditional banking services, which could offer more flexibility to the client and the firm.”

Cerulli’s latest report, U.S. Retail Investor Products and Platforms 2014: Matching Product and Distribution Strategy to Client Demands, examines some of retail investors’ product preferences, product use and product needs. Data from this report comes from an ongoing survey of more than 10,000 U.S. households annually in partnership with Phoenix Marketing International. Interviews with more than 40 executives across the industry provide qualitative insight.

Cerulli found that the average household is interested in making additional contributions to more than 3 types of products, with the highest interest overall in education accounts.

“Providers should not underestimate educational accounts as part of a comprehensive financial plan, especially considering these accounts are the most commonly cited product of interest across all households,” Cerulli states in their report. “These products are often overlooked by advisors because contributions are restricted yearly.”

The age of the investor, also, strongly figures into which and how many products.

“Interest levels decline with age, with those investors under age 30 considering contributions to six products, while those between 60 and 69 select just 2.4 responses each,” according to Cerulli.

Cerulli reports that “those younger than 30 are the most interested in different investments and products.”

Meanwhile, the majority of the investors 60 and older plan on making no changes or contributing to legacy savings accounts, such as educational accounts for their grandchildren.

When Cerulli studied investors’ planned allocation of their overall household assets in the coming six months, individual investors from all households indicated that they will allocate 40% of their household asset to U.S. equities (stocks and stock mutual funds), 21% to cash that includes checking, savings, money market funds, and CDs, 13% to commercial and residential real estate and 11% to U.S. fixed income over the next six months.

The rest of their household assets are divided minimally across foreign equities, collectibles, foreign fixed income, commodities, alternative investments and derivatives.

“Consumers do not plan on increasing allocation to non-standard asset classes,” Cerulli reports. Adding that “while asset managers are creating open-end alternative mutual funds at a fast pace, they believe that the market for these funds will be slow in developing. Several wirehouses and large RIAs are beginning to advocate that their advisors allocate client assets to alternatives, yet asset managers are considerably less sanguine about the prospects of seeing substantial allocations to client portfolios. Managers that provide liquid alternatives believe it will take five to 10 years for the clients’ allocations to alternatives to reach 10% to 15% of overall assets.”

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