Banks Grab at Bigger Retirement Share

BOSTON (TheStreet) -- Despite widespread complaints -- and considerable outrage -- directed at the nation's "big banks," Americans increasingly turn to them for investment advice.

Research by Hearts & Wallets, a firm that analyzes retirement market trends for the financial services industry, shows that banks now serve as the primary source of retirement advice for 43% of Americans, an increase of two percentage points from a year ago, with gains across all investment product categories.

Despite anger at "big banks," more pre-retirees are turning to them for their nest egg needs.

The findings come from a survey of more than 4,500 households nationally and statistics based on 9,000 responses on specific financial firms.

Among the evidence of growing leadership by banks in the retirement advice area was Bank of America's(BAC) jump from being the primary retirement advice source for only 27% of its customers in 2010 to 48% in 2011.

"This growth shows Bank of America's efforts to put its retirement messaging in front of so many customers, at ATMs, in branches, and on its Web site, is working," says Chris Brown, principal of Hearts & Wallets and founder of New Hampshire-based Sway Research. "The bank's relaunch of its retirement income calculator in Q4 2010 was well done, positively reflecting recent changes in consumer attitudes to retirement."

Some broad trends may explain why banks are poised to gain even more prominence in the retirement space.

Laura Varas, Hearts & Wallets principal and president of Massachusetts-based Mast Hill Consulting, says many younger investors have a grim view of their retirement prospects. Saving for many of them is not as much about a traditional retirement as having a "Plan B."

"It's more about being safe and protecting yourself and having enough money if you lose your job or for when you are no longer able to work," Varas says. "It is a backup plan." Survey responses also indicate that some are perhaps turning to banks because they "are thinking that their employer really isn't responsible for their retirement."

"The employer-sponsored plan, rather than being the solution, becomes one of the solutions," she adds. "People are looking for a lot of security right now, having seen so many gyrations, ups and downs and having lost so much money. That's why the banks and the products that they offer, with the security of the principal, really does have a lot of appeal. It is also something that is there all the time. With your employer, you may switch jobs a couple of times, but the bank is always there."