Managing Your Wealth
Investments | Current Trends
With the recent event of the sub-prime crisis, a weakening global banking environment,
and a globally felt recession, along with their ensuing effects have resulted in
people and institutions being extremely cautious about their assets and investment
of their assets. Client needs are changing fundamentally, driven on the retail front
by the looming retirement of the biggest demographic wave in our country’s history,
and on the institutional side by worsening pension deficits. All of this is taking
place amid an uncertain market environment that is breeding enormous levels of anxiety
among all types of investors. Looking ahead to 2010 and beyond, we see an asset
management industry that looks markedly different than it does today.
As the biggest demographic wave in our country’s history, the baby boomers, transition
out of the workforce over the years to come, this unprecedented demographic shift
will bring some crucial implications for asset managers. Foremost among these is
that investable assets controlled by retirees and near retirees will account for
almost two-thirds of all assets by 2010. As a result, the financial products and
advice demanded by millions of investors will shift dramatically, from an almost
exclusive focus on savings and accumulation, to a much heavier emphasis on wealth
preservation strategies such as income generation and principal protection. Unfortunately,
today’s asset managers are exclusively fixed on providing alpha/beta returns to
their clients rather than strategies coupled with conservative asset allocations
and risk management such as hedging or insuring risk.
As millions of baby boomers move into their retirement years, they will be forced
to bear a whole array of financial risks that previous generations didn’t have to
contemplate. These clients are now actively interested in purchasing financial products
that will not only limit their exposure to market risk, but also to inflation, taxation,
health care, longevity and other risks.
By engaging in our wealth management services, businesses, families, and individuals
may be better equipped to manage their assets and portfolio risk.