What’s in Your Portfolio? Examining Pre-Retirees’ Investment Portfolios

Boston, MA, August 6, 2008 – A new report from Aite Group, LLC reveals that mass-affluent and high-net-worth investors around retirement age are discontent with the product mix in their investment portfolios. The report, which is based on an October 2007 survey of 505 individuals within five years of retiring or having retired, provides insight into which financial products they believe should be playing either a larger or smaller role in their portfolios.

While financial services marketers have proven themselves adept at understanding the impact of life changes on the financial product needs of consumers, this isn't enough to capture what's really on the consumer's mind. Many pre-retirees don't know whether their current income will continue to grow until they retire, whether their current investment style is truly as conservative or aggressive as they think it is, or how working part-time after retiring will impact their retirement planning efforts. According to the survey, there is massive discontent among this group of investors regarding their portfolios. Of investors surveyed, 99.5% identified at least one financial product that they believed should play either a larger or smaller role in their portfolio. For example, roughly four out of 10 investors who hold mutual funds, CDs or stocks believe each of these instruments should play a larger role in their portfolios.

"With so many pre-retirees and retirees of the opinion that their mix of financial products should be scaled differently within their portfolios, engaging these customers and identifying their specific needs should be a top sales priority," says Ron Shevlin, senior analyst with Aite Group and author of this report. "Financial firms are too parochial regarding the products they push, don't adequately train their advisors and reps, and don't ask the right questions or provide their customers with the right information to make smart retirement investment decisions. It would be in these firms' best interests to reorient their marketing communications, identify retirement personas, and develop persona-based target portfolios."

This 15-page Impact Note contains nine figures and eight tables. Clients of Aite Group's Wealth Management service can download the report.