08.11.21
Most of Your A and B Clients Are Probably Retired
by: Tim Kehrer and Ken Kehrer, Kehrer Bielan Research & Consulting
At a recent Kehrer Bielan virtual dialogue on retirement income planning, Larry Cohen of Strategic Business Insights presented the latest data from the Macromonitor on trends in what Kehrer Bielan identifies as retirement Investors—pre-retired and retired households with at least $100,000 in financial assets. Last summer, we reached the tipping point where the retired retirement investors outnumbered the pre-retired for the first time.
For the typical advisor in a bank, that means more than half of your best clients are probably now retired. The dialogue examined how the advice needed by the retired retirement investor differed from the pre-retired, and that the complexities of withdrawal strategies, tax efficiencies, legacy objectives, and mortality and morbidity risk taxed an advisor’s ability to serve these needs.
We conceived of the concept of retirement investors to provide more useful information to the bank financial advice community—homing in on the households that bank and credit union advisors want to serve. The pre-retired retirement investor households have reached the point where the kids are out of the house and the focus of saving and investment has shifted from education expenses and buying a home, to planning for retirement. We set the asset threshold for retirement investors at $100,000 in financial assets, because that is the target threshold that so many financial institutions have established as the level to be served by an advisor.
In recognition that this threshold has been rising in some firms, we segmented out pre-retired and retired households with more than $250,000 in financial assets.
Retirement Income Households
(Millions)
|
$100,000 -$250,000 in financial assets
|
Over $250,000 in financial assets
|
Over $100,000 in financial assets
|
Pre-retired
|
5.4
|
11.9
|
17.3
|
Retired
|
5.6
|
13.6
|
19.1
|
Total
|
10.9
|
25.5
|
36.4
|
Source: 2020-2021 Macromonitor, Consumer Financial Decisions, Strategic Business Insights
These segments look like the A and B clients for many advisors.
The conversation coalesced around the need to build your relationship with both the retired and pre-retired retirement investors on a foundation of financial planning, backed up with easy access to broader expertise as the client’s needs become more complex.
Learn more about Kehrer Bielan's recent virtual dialogue on retirement income planning.