Companies that make a profit off of providing investment advice are looking hungrily for ways to persuade people involved in retirement planning to turn to them for advice.
While they'd like to grab customers who are really affluent, they are also finding ways to sell their services to what is known as the Mass Affluent -- 28 million households with $50,000 to $250,000 assets they can invest.
Bank of America/Merrill Lynch has been one of the most aggressive in this space. The company recently surveyed these consumers and found them relatively pessimistic about their retirement prospects. Some 57 percent told Merrill that they believe it will be harder to save for the long-term five years from now compared to today, and 27 percent feel that it will be equally as difficult. Nevertheless, 21 percent reported that they have increased their savings in the last year, and 23 percent believe their financial situation has improved in the last 12 months.
Of those people seeing an improvement:
- 42 percent say the have eliminated unnecessary expenses
- 40 percent say they are paying their bills on time so they don't incur any costly penalties
- 37 percent say they have made a budget a budget and are sticking to it.
One respondent told Merrill, “Every week, I have the bank automatically transfer cash from my checking account to my savings account. If I manage for a month without that money, I increase it the next month."
In a conference call for reporters this afternoon, John Thiel, head of U.S. Wealth Management and the Private Banking and Investment Group for Merrill Lynch Wealth Management, said he believed that people are adjusting their habits to the tough economy and the low-interest rate environment and "deleverging makes them feel better."
The mass affluents are also increasingly conservative about how they are investing their money, Merrill says with 47 percent saying they have a "conservative" or "very conservative" tolerance for risk.
At the same time, this group is facing up to new retirement realities with 47 percent of those surveyed expect to retire later than they planned a year ago, up from 42 percent who responded that way in January.
It sounds like my grandma -- working until she was in her 90s and keeping her money under the mattress.