The Coming Consolidation: Making the Short List Retirement Income Industry Association Strategic Study Series March 2008

Strategic Business Insights' (SBI's) Consumer Financial Decisions (CFD), along with Turner Consulting LLC, is pleased to offer the full version of this report to current RIIA members and other institutions interested in learning more about consumers' financial attitudes, behaviors, and needs regarding retirement.

This 27-page report fully presents the research describing the trends that are converging to create industry-wide consolidation, and recommends ways that financial institutions can position themselves to succeed in an even more competitive environment. Anyone may purchase the full version of this report for $5000. (RIIA members may purchase this full version at a discount, or download the members' version of this report at the RIIA Members Web site. If you are a RIIA member and would like more information, please contact Deborah Burkholder; +1-617-342-7390.) Also available for purchase are the report data in (dynamic) Excel format for an additional fee of $1500.

If you have any questions, comments, or suggestions about this report, or for more information about ways in which CFD can help your institution, please feel free to contact us.

About This Report

When an industry with too many financial institutions meets retiring households who want to simplify their lives, expect households to begin consolidating their financial relationships and looking for a few good institutions to meet their financial needs. Boomer retirements present households with the opportunity to come closer to their fantasy of dealing with one-stop financial shops by reducing the number of financial services relationships and expecting more of the relationships that remain.

Would Prefer Using One Financial Services Company If It Could Meet a Majority of My Household's Needs

From the financial services company point of view, this consumer behavior will result in an industry-wide consolidation that leaves the institutions that remain with more business. Using the extensive consumer research provided by SBI's MacroMonitor, this report presents the new rules of the marketplace that winning institutions and advisors will use in order to be on the "short list" of firms that retirees will choose to meet their emerging needs. This study not only probes one of the root causes of a coming change in Boomers' behaviors and attitudes, but also provides insight to firms on ways that they position themselves to be winners in the emerging marketplace.

Report Introduction

Much has been written over the last few years concerning the retirement of the Boomers and the implications for the financial services industry of this transition in their lives. At least half of the 76 million Boomers will reach retirement age in the next decade, which certainly seems significant, both for the Boomers themselves and for the financial services industry with which they have invested their assets. The Boomers are not all at that retirement age yet. There remains considerable uncertainty about exactly how financial institutions will be impacted.

Using the extensive consumer research provided by the MacroMonitor1 this study explores the ways that the maturing of the Boomer generation will impact financial services firms. Furthermore, the study probes one of the root causes of a coming change in Boomers' behaviors and attitudes that will significantly impact the financial services community. This study will also provide insight for firms on ways they can use the coming trends to their advantage and position themselves as winners in the emerging marketplace.

To order a copy of this report, download and print the fax order form, fill it out and fax it to +1-650-859-4544, or order online.

For more information about RIIA's Strategic Study Series, this report, or ways in which these findings (and others) may be applied to your needs, please contact:

Larry Cohen
Vice President, Director
Consumer Financial Decisions
+1-609-378-5042
lcohen@sbi-i.com

Elvin D. Turner, JD MBA
Managing Director
Turner Consulting LLC
+1-860-242-4878
turnerconsultllc@comcast.net

Table of Contents

Section Page
Table of Exhibits 2
Introduction 3
Executive Summary 3
Households Using Fewer Financial Institutions 5
Households Simplifying their Lives 8
Households Shift to Conspicuous Conservation 15
The New Marketing Paradigm 18
Conclusion 20
Appendix A: RIIA Institution and Advisor Retirement Series 21
Appendix B: Study Participants 23
SRI Consulting Business Intelligence (now Strategic Business Insights) 23
Turner Consulting LLC 24
Appendix C: MacroMonitor Survey Methodology 25
Appendix D: Supporting Data 26

Table of Exhibits

Number Information
Figure 1 Average Number of Institutions Used By U.S. Households
Figure 2 Average Number of Financial Products Held By U.S. Households
Figure 3 Number of Financial Products Held By U.S. Households Per Financial Institution: 1992 to 2004
Figure 4 Percentage of U.S. Households who agree: "I like to keep my financial affairs uncomplicated"
Figure 5 Average Number of Financial Institutions Used By U.S. Households By RIIA Age/Wealth Segments
Figure 6 Average Number of Financial Institutions Used By U.S. Households by SRIC-BI (now SBI) Life-Stage/Wealth Segments
Figure 7 Percentage of U.S. Households who agree:"Would prefer using one financial services company if it could meet a majority of my households needs"
Figure 8 Average Number of Financial Products Held By U.S. Households By RIIA Age/Wealth Segments
Figure 9 Percentage of U.S. Households who agree:"I would like to go to just one person who could help me with my savings, investments, and credit needs"
Figure 10 Comparison of the Use of Financial Products by Affluent Pre-Retired and Retired Households
Figure 11 Institution and Advisor Boomer Opportunity