Middle Market Investors: What Banks Need to Know

April 4, 2007,  SOURCE: InsuranceNewsNet, Inc.

In the 2006 report "Winning the Battle for Retirement Assets: Wealth Management or Product Pitch Polemics?" research and consulting firm TowerGroup reported that financial services institutions have a multi-trillion dollar opportunity in their hands. To take advantage of this, the group advised banks offer services that are tailor-made for the different market segments: the mass market, the affluent, and high-net-worth clients.

When it comes to the retirement income needs of middle market investors, bank representatives are qualified to address them. This obviously creates competition for other channels. This information is according to the recently released survey conducted by the Bank Insurance & Securities Association (BISA) and Symetra Financial.

The study was conducted to evaluate just how ready bank representatives are in helping consumers convert their savings into a dependable source income after they leave the workforce. Unlike other financial services companies that focus mostly on high net-worth investors, BISA revealed banking institutions were more equipped to handle the broader-based retirement income market.

BISA concluded that the survey results indicate a tremendous business opportunity for the banking industry and other financial service institutions to create products, training and support that will be needed by bank clients to retire successfully. The right product mix, enhanced training and support to satisfy the needs of a wider client group are crucial elements if banks are to succeed in tapping the retirement income market, revealed BISA.

Some of the major details from BISA's survey of 958 representatives include:

  • 74% considered retirement income products and solutions as "highly important" to their ongoing financial planning activities

  • 79% of bank representatives are concentrating on clients with $250,000 to $500,000 in investable assets

  • 47% of bank representatives were leaning towards working with clients holding $50,000 to $250,000 in investable assets

  • The middle market and mass affluent investor segments are the most significant potential client pool in the retirement income market

  • 90 % of the respondents indicated dissatisfaction with the insufficiency of dedicated retirement income support resources available at their institution

  • 7% of the bank representatives surveyed said they were "very satisfied" with the level of sales tools available to them

  • 79% of bank representatives that have access to in-house support use of their resources

  • When it comes to dispensing financial advise, bank representatives said their familiarity with various products and investment options are making them shift to an asset distribution strategy from an asset accumulation approach

Posted by Mark Rodrigues at 4/4/2007 4:36 PM
Categories: wealth marketing
 

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