Magazine article American Banker

The Middle-Aged Seen as Better Prospects Than Seniors

Magazine article American Banker

The Middle-Aged Seen as Better Prospects Than Seniors

Article excerpt

Banks that sell mutual funds and annuities may be overlooking their best prospects, according to a new survey commissioned by Liberty Financial Cos.

It found that middle-aged people - those 40 to 59 - are more receptive than their elders to buying a wide range of investment products from banks. Yet most banks target an older, mostly retired clientele.

Boston-based Liberty Financial is a leading seller of mutual funds and annuities through banks. The survey, based on responses from 250 households with incomes of $50,000 to $200,000, was conducted on behalf of Liberty's bank sales group by Research and Forecasts, a New York polling firm.

Fresh Information

To be sure, Liberty's fortunes are linked to banks' increased sales of these products. But Ronald S. Robbins, president of Liberty Financial Bank Group, said the survey provides fresh information that banks can put to good use, no matter who their product vendor is.

"Traditionally, banks have concentrated on the older market segment," Mr. Robbins said. "These data seem to indicate that banks may be successful in targeting the upper-middle-income baby boomers with products such as mutual funds."

The survey, conducted during the first two weeks of September, also underscored consumers' discontent with low interest rates on bank deposits.

Unhappy with Rates

Only 10% of respondents said they were satisfied with the interest rates on certificates of deposit, and 38% said they planned to shift more of their savings and investments to mutual funds.

Among the key findings:

* 44% of respondents ages 40 to 59 would buy money market funds from a bank, compared with 30% of those 60 and over.

* 34% of the middle-aged consumers would go to a bank for annuities, compared with 10% of the older respondents.

* 20% of the middle-aged group would buy term life insurance from a bank, versus 10% of the older group. …

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