Lack of Financial Advisors Serving Mass Market

There is a factoid that stuck in my head after reading the recent paper on retirement income sponsored by the Society of Actuaries.

The paper references a finding from a survey of financial advisors (I think from 2004):

• Only 11 percent of the financial advisors surveyed were interested in and/or willing to serve clients with less than $250,000 in assets.

I think that this statistic pretty much sums-up the problem (and opportunity) in the retirement income industry.

The mass market (not to be confused with mass affluent) represents the vast majority of the addressable retirement income market--not so much in terms of assets but rather numbers of people.

This mass market segment is most in need to sound financial services--both products and planning.

Financial advisors have business models that are contingent on accumulating assets, so serving a highly fragmented, low asset market is just not going to work.  Fee-only services are interesting but people don't like to pay directly for financial advice.

The market segment that is most in need is at the same time the most under-served.