The Boulevard to Financial Independence

It is clear that banks have a lot of catch up work to do when it comes to the retirement market. A recent survey that comes from the banking industry points out:

“Only 14 percent of mass affluent consumers cited their bank as their
primary provider of retirement savings, compared to 53 percent for
investment and brokerage firms. Additionally, banks captured just 18
percent of 401(k) rollovers to an IRA compared with 67 percent for
investment and brokerage firms in the past year.”

However, it’s not like consumers aren’t planning for retirement. The study points out:

“…the mass affluent are clearly engaged in
retirement planning. A majority (59 percent) cite saving for retirement as
their top financial priority, followed by paying bills (cited by 34 percent
as a top priority). Nearly all (89 percent) report having done some form of
retirement planning.”

The study goes on to say that banks are now getting punished for being focused on transactions instead of advisory focused and that consumers do not consider them the go-to source for financial advice. Given that most bankers are not trained as advisors, who do banks then make the transition to a model that is more focused on customized solutions? For banks in wealthy areas, they can build out a wealth management team, but what about banks that don’t have enough customers with over $500k in investable assets?

At Boulevard R, we’re focused on delivering actionable, customized advice to consumers who don’t qualify for wealth management services. These are the people that no one has yet figured out how to reach . While investing is important for these folks, we’re more interested in helping them save for retirement and then make investment decisions that aligned with their risk profile and what they want to do in retirement. We feel a mix of a non-threatening interface, actionable advice and community generated tips on how to get on track for retirement will be a great start.

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There was an op-ed in Investment News the other day that underscored the reason why consumers are distrustful of their financial providers and increasingly dissatisfied.

The article briefly discussed the scarcity of qualified financial advisors and then provided a first person account (from the perspective of a newly minted planner) of how the planner profession had an aggressive emphasis on sales and branding.  In essence, the article said that in the planner job market, sales skills are more than it is  a strong grasp of fiancial planning.  While knowing how to attract and retain clients is important, the ability to move product shouldn’t take precedent over the knowledge of appropriate client solutions.

It’s not like consumers haven’t noticed.  Nearly 70% of investors feel that “financial advisors and advisory firms put their own interests ahead of their clients” (Annual Securities Industry Association Investor Survey). Given this statistic, the interests of consumers and the interests of their providers seem seriously out of alignment. A recent study put out by BAI advocates that banks need to focus on establishing a dialogue with customers around their plan for retirement. While this is an important first step, a dialogue that doesn’t result in a retirement plan with the consumer firmly in the driver’s seat is insufficient. Planners need to act as customer advocates, not product advocates.

New startups, like Cake Financial, are beginning to recognize that there is a significant opportunity in providing unbiased advice to consumers while leveraging the knowledge of it’s users. Similarly, Boulevard R is developing features that will deliver the customized advice that consumers need to get on track for retirement- including experts who can respond to technical questions, as well as peers who are coming up with creative ways to save for retirement.

This sort of alignment (or common sense) with what consumers are looking for, will ultimately benefit everyone involved. Even though financial services is a conservative industry, we hope that providers start to think more creatively about how they can best serve their customer’s needs so that they can drive that 70% down towards 0%.

Thanks to Davis Janowski, we were recently featured in an Investment News article.  Investment News covers issues for financial advisors and it was great speaking with Davis who understood the need to provide services to the mass market and also liked the interactive nature of the interface.

The opportunity to address the larger market, not the millionaires, is what is really significant in Boulevard R’s model.  Retirement is such a concerning issue for so many people that  if we can provide them with effective, customized tools and the support they need, we’ll be successful.