Peak Accumulators and the Harbingers of Changing Investor Advice Preferences

The mid-career investor opportunity is not just about gathering assets from over-looked segments where competition is sparse; it’s about future delivery models of investment advice. Future asset growth will come from mid-career investors who are in their “Peak Accumulation” years. And these investors are already behaving in ways that are very different than older investors, giving clues to which competencies and investments today will lead to long-term competitive advantages. The Wall Street Journal recently covered this theme, while discussing our new research.

The crash taught these valuable high-growth customers two things: they don’t know what they’re doing, and they don’t know whom to trust. The post-crash attitudes and actions we’re tracking are rational responses to these two conflicting realities. While current investment disciplines are the building blocks, these investors are seeking new ways to try out new providers and triangulate the various sources of advice available to them. The old spectrum of self-directed/delegator is no longer useful. In fact, the ways they’re combining technology and live channels promises to change the competitive landscape among distributors, and, in turn, among the asset managers who rely on diverse channels.

In Capturing the Hearts & Wallets of Peak Accumulators: Building Profitable Investment Business among Generation X and Younger Boomers, Chris and I begin to lay out the foundation for messaging and offerings that will motivate these investors-initially, to break the holding pattern they’ve been in, and, longer-term, to win their hearts and wallets over the years. Our actionable research outlines strategies and tactics based on behavioral segmentation, insight into values, concerns and interests, trial and acquisition patterns, product usage, and channel trends.

The recession may or may not be over yet, but it will end some day. Historically, the aggressive players move first and may even contribute to jump-starting things again; the reward is that they get to define the future. We are confident that, one way or another, rejuvenated asset accumulation strategies, and new ways to deliver investment advice, will be part of the recovery.

Painful re-organizations behind them, many of our clients are telling us they are creating teams to assess target markets, and to determine what focus areas should receive the limited resources available. Our goal is to provide cost-effective, actionable, and provocative insight into high-growth, high-opportunity areas, like mid-career investors and post-crash investment advice, which can form the foundation for the diverse paths different firms will choose. Laura Varas