Report: Young Boomers an Advisor Challenge

December 13, 2005 ( - The task for financial advisors working with affluent young baby boomers may be more of a challenge than once thought, according to a new research paper.

A new paper from the Spectrem Group said these 40 to 45-year-olds are more likely to be juggling a more complicated investment portfolio than their older brethren.

In fact, according to Spectrem, a higher percentage of the young boomers, for example, hold hedge funds, private equity and futures investments than the other Baby Boomer segments for each asset class. Not only that, but a third of the young boomers likewise hold stock options and 30% hold restricted stock – higher than the other Baby Boomer segments.

Looking at asset allocation, nearly a third (31%) of their portfolios is dedicated to real estate.

“Serving the Barely Boomer segment of the affluent market requires advisors who possess a particularly broad skill set,” the report said.

About a quarter of the young boomers use full service brokers as their primary advisors, lower than 37% for Working Boomers (ages 46-60) and 31% for Retiring Boomers (ages 61-70). That is also lower than Retirees (ages 71 and up) at 32%. A higher percentage of the young boomers chooses accountants (19%), independent financial planners (24%) and investment managers (19%) as their primary advisors than the other Baby Boomer segments.

“Affluent members of this young group are an important market segment for the financial services industry,” Spectrem asserted.

In all, there are approximately 700,000 affluent Barely Boomers in the United States, defined as those ages 40 to 45 with more than $500,000 in investable assets, according to the study. Of this group, 88% say their primary investment strategy is building wealth rather than preserving it and 85% have set aside a portion of their assets for more speculative or higher risk investments.

The report is based on data from Ultra High Net Worth 2005 and the Affluent Study, which was released in early 2005. The two studies were drawn from a total of 969 responses to mail-based questionnaires.

For copies of Spectrem reports, contact the company at 641 W. Lake Street, Suite 402, Chicago, IL 60661, (312) 382-8284 or go to .