Are older investors the new niche for planners?

March 2, 2018
3 min read

Shifting consumer demographics and the demise of pensions are combining to force advisers to shift their focus from helping clients accumulate retirement savings to helping them manage their savings so they last through retirement. According to the US Census Bureau, 24 million Baby Boomers are now 65 and older and 33 million more will join them by 2023. The first wave of Boomers are turning 72 in 2018, with 10,000 Boomers crossing that threshold every day for the next 17 years.
59% of Baby Boomers are confident they will have enough saved for retirement.
Whether they are retired or still working, Boomers have unique planning needs as they transition from earning income to living off savings. For most, investing strategies change from asset accumulation to asset preservation as retirees focus on making sure they don’t outlive their savings. Mintel’s US report on investment trends shows that 59% of Baby Boomers are confident they will have enough saved for retirement. What’s more, those who have a retirement plan have to begin meeting minimum distribution requirements at age 70.5, further changing their distribution strategy.

Startups target retirees

With people living longer and often retiring earlier, many consumers need guidance to make sure they don’t outlive their savings.  While retiring investors have largely been ignored by the investment community, a new crop of start-ups recognizes retirees need help transitioning and are developing services targeted to older investors to help them maximize the income that will see them through retirement.

Launched in June 2016, United Income provides financial planning and money management services to clients who are making the transition to living off their retirement savings. It offers those close to retirement and those already retired help in making decisions on how and when to draw down their accounts, how to budget on a fixed income, and how to reduce their taxes wherever possible. Asset management services are available for a fee and clients can also opt to have United Income complete retirement paperwork, enroll in Social Security and Medicare benefits, and recommend elderly care services.

Meanwhile, True Link raised another $3.6 million in 2016 to market itself more aggressively to seniors, a segment the company feels is underserved and filled with potential. It is a retiree-focused hybrid advice platform that offers the convenience of digital advice along with the ability to talk to a human on the phone, assuring seniors that they can get the personal attention many prefer. A main differentiator for the company is the True Link card, a prepaid card marketed as a way for seniors to maintain control of their spending without fear of fraud.

What we think

People are living longer and retiring earlier, which puts more strain on the savings they have accumulated. Retirees have different needs than younger investors, and the growing number of retirees means that demographics will drive the need for financial advice. Firms and advisers who can adjust to helping with the income distribution needs of retirees will find themselves in the best position to grow their businesses.

Jennifer White Boehm
Jennifer White Boehm

Jennifer White Boehm is the Associate Director of Financial Services. She focuses on financial services reports after previously working on Mintel Comperemedia’s Research Consultancy team.

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