Wealth management due for $10 trillion shift

By Joe Rauch
Tue Oct 6, 2009

BOSTON (Reuters) – U.S. financial advisors are due for upheaval as baby boomers, controlling $10 trillion in assets, reach retirement age and shift their investment priorities, said a senior executive at asset manager BlackRock Inc (BLK.N: Quote, Profile, Research, Stock Buzz).

Baby boomers will move the industry’s main client goal from one from accumulation — investing in assets that create the most value over time — to one of “decumulation,” said Frank Porcelli, who heads U.S. retail for BlackRock, at the Reuters Global Wealth Management Summit in Boston.

“The questions won’t be, ‘How did I do against the S&P 500?'” he said. “It’s, ‘Can I meet these liabilities?'”

Instead of a focus on building wealth and a retirement nest egg, those clients will soon focus on making the money last.

Baby boomers, he said, are increasingly spooked by the turbulent markets of the past year, and concerned with ensuring their funds last through retirements that could last 20 years or more.

The $10 trillion that will be in the control of the newly-retired will dictate a more conservative investment and spending approach.

BlackRock is one of the world’s largest investment managers and advisors, with $1.37 trillion in client assets under management and providing services to clients with $7 trillion in assets.

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