Retiring Boomers Represent Next Big Windfall for Funds
April 18, 2005
Fidelity Investments, already top dog among U.S. mutual fund complexes in the retirement field, is positioning itself to get an even bigger chunk of the market.
By recently launching new investment services like the Fidelity Retirement Income Advantage Program, which helps investors streamline their resources with an eye on retirement, the Boston-based firm is poised to nab upwards of half of the 76 million Baby Boomers who will begin retiring in the next decade, according to Jim Lowell, editor of the independent newsletter Fidelity Investor.
Lowell, whose remarks appeared in a recent Reuters report, said that the Baby Boomer retirement market represents $20 trillion.
"Fidelity is the only player of scope and scale already selling a platform to serve those people," Lowell said in the report. "This is an untapped pot of gold and the end of the rainbow is near. They could get half of it."
On average, a retired Baby Boomer household will have more than nine sources of income, including pensions, 401(k)s and Social Security, suggesting that a full-service approach like the one being employed by Fidelity could pay big dividends.
"Whoever does it now stands the best chance of getting their money. Fidelity completely understands that. I don't think they're untouchable, but certainly unstoppable," Lowell said, citing Merrill Lynch and Citigroup as potential challengers.
Hometown rival Putnam Investments is taking an entirely different approach to the demographic. It's decided to go after Baby Boomers through its network of financial advisers. Another key player, T. Rowe Price, admits that the competition from Boomers will get heated, but declined to elaborate on its strategy.