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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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.

By Randy

Marriette, you have good instincts. While saving for retirement should always be a priority, one of the most effective ways to “earn” a good return on your money is to pay down your debt. When you consider that the long run returns of the stock market are somewhere in the vicinity of 10-11% per year pre-tax, a realistic after tax return expectation is closer to 8%. If you are paying interest on debt, other than the mortgage on your house, at a rate above 8% you actually will get a better “return” paying off the loan as opposed to investing the money in stocks. It’s easy to think of your student loans or credit card debt as just a payment, but a good part of that payment is interest. If you can’t earn more on your investments after tax than you are paying in interest on your loan then your priority should be to pay off the loan.

There is an exception though (isn’t there always) when it comes to most people’s 401k savings. If your employer offers a match for a portion of your savings then that’s a gift to you that you do not want to miss. Think of it this way, if your employer matches your 401k contribution up to $5,000 then your $5,000 savings just got a 100% return! I sincerely hope that a 100% return beats the interest rate on even your worst loan.

So good work Marriette and keep whittling away at your debt. The beauty of that is as you begin to eliminate debt you’ll have fewer payments and more free savings to make the rest of the debt go away even faster. It may not feel like you’re making progress at first but you’ll be surprised how quickly you’ll get ahead if you just keep it up.

By Matt

Just like in the real world, the “Innovation” in our heading has a big “I” and a small “i.”

Curve-jumping, paradigm-shifting innovation belongs to the big “I.” Incremental change and tweaking belongs to the small “i.” They each have their place and deserve recognition, but here are Boulevard R, we’re more interested in the former. That’s mostly because we’re trying to do something that hasn’t been pulled off effectively online- financial planning. There is quite a list of companies who have gone the route of offering online financial advice to consumers, but only to be forced into other markets- Financial Engines (does mostly asset management now), AdviceAmerica (does mostly software for planners now), OneHarbor (sold to a large financial services company in order to re-coup investor’s money).
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By Mariette

Change is difficult, and the hardest things to change are our habits. This is important to remember when we are trying to change our relationship to money. When we are trying to get out of debt, develop healthy saving and investing habits, or beginning to save for retirement, we must have patience with ourselves as it will not happen overnight. Most of us will slip back into our old habit patterns, particularly in the beginning; we will go over our budget with our spending, blow too much money on that gadget we thought we just had to have and therefore not be able to pay down the debt that month, or not put as much money into our retirement fund as we had intended.
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