This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Banks Go After Orphan Retirement Funds

Luis Fleites, vice president and director for retirement markets at Financial Research in Boston, sees the inroads made by banks as the result of their existing customer relationships and the avoidance of risk exhibited by post-recession investors.

"Obviously, banks do offer the more aggressive or traditional investment products that the other places have," he says. "But a good portion of the bank benefit came from their conservative nature, being FDIC insured and their guaranteed products."

For banks denoted as the primary bank, overall wallet share capture among customers with a retirement relationship (76%) is consistently and significantly larger than that of customers without such a relationship (26%).

Fleites said the fact that banks continued to make inroads in 2009 may indicate that their increasing share of the retirement market is not an aberration. The challenge for both large institutions, like Bank of America (BAC) and Wells Fargo (WF), as well as smaller banks, is to maintain the momentum by aggressively marketing their services and improving the quality of product offerings in order to remain competitive.

"Banks are expanding their services and their lineups and starting to understand that retirement is a very big area that they need to be present in," he says. "As banks start to offer more in this space it just makes sense that their market share is going to increase just because of the contact they have with their client base."

Although insurance companies have traditionally finished third in the race for retirement assets, the increasing popularity of annuity products could level the playing field in the months ahead.

Gary Bhojwani, chief executive of Allianz Life Insurance of North America, part of global financial services firm, Allianz (AZ), sees annuity providers charging more aggressively into the 401(k) space.

"It's a huge opportunity," he says. "I think that the next big frontier for us, and our industry, is how to offer annuities within a 401k wrapper. For our part, I'd like to be in a position to really capitalize on this within the next year or so."

-- Reported by Joe Mont in Boston.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $118.59 0.66%
FB $103.93 -1.40%
GOOG $744.03 -0.83%
TSLA $230.48 -0.49%
YHOO $33.30 1.10%


Chart of I:DJI
DOW 17,756.97 -41.52 -0.23%
S&P 500 2,085.41 -4.70 -0.22%
NASDAQ 5,104.4380 -23.0870 -0.45%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs