Retirement Market 2021
Summary
The retirement and pension industry has been slow to digitally revolutionize, but in recent years some players have taken much-needed steps to do so - especially as the intergenerational wealth transfer puts pressure on wealth managers to keep family wealth in-house. Not to mention, retirement is a key motivation for both the younger and older generations to invest in the first place. Successful retirement services do not solely focus on retirees, but this major life event requires building a relationship with the heirs to the throne as early as possible, which is key for retention. With simplicity and customer experience coming to the forefront of the wealth management space via technology, utilizing emerging technologies to manage pension services will be welcomed by customers.
This report discusses the global retirement wealth market, covering the current size of the prize and forecast growth over the next few years. It focuses on retiree investment behavior and how it differs from pre-retirement. The report also includes analysis on which retirement services are in demand among different demographics and how wealth managers and financial services providers are using technology to develop their retirement propositions.
Scope
- The global liquid wealth held by retirees is forecast to surpass $35 trillion by 2025, with HNW individuals surpassing $17 trillion by 2025.
- Liquid assets outweigh pension assets in most countries, but the value of pensions held by retirees tends to outweigh non-pension assets.
- Over a third of global wealth managers do not offer retirement services, missing out on a lucrative segment.
- As female investors’ wealth continues to grow, they represent a worthwhile demographic for pension providers to target.
- Understand the size and forecast for the global retiree wealth market, including regional variations and market leaders in terms of value of pension assets.
- Explore the importance of retirement as a driver for consumers to become investors and how it dominates decisions regarding their investment portfolio.
- Gain recommendations on what wealth managers and financial services providers must do to hold on to retiree wealth and how to target different demographics.
- Look at how technology is transforming retirement services and understand best practices in retirement planning.
- Executive Summary
- Market overview
- Key findings
- Critical success factors
- Sizing and Forecasting the Retirement Market
- The global retiree wealth market is expected to surpass $35 trillion by 2025
- Table Figure 1: HNW retirees will have seen 11% growth in 2021, surpassing the $13 trillion mark
- Table Figure 2: The number of HNW retirees will have recorded 12% growth in 2021, surpassing the 3 million mark
- Regional variations in pension and investment holdings are significant
- Table Figure 3: HNW retirees in Asia-Pacific harbor the largest proportion of liquid assets despite accounting for the fewest individuals
- Table Figure 4: Mass affluent retirees in Europe hold just under $3 trillion in liquid assets
- Table Figure 5: North American retirees harbor the most wealth of any region
- The pension market in the US is the largest worldwide
- Table Total pension assets by country ($ million), top 10, 2015-20
- Table Figure 6: Bonds and equities are the most popular asset classes in pension funds
- Table Liquid and pension assets of retirees ($ million), 2020
- The global retiree wealth market is expected to surpass $35 trillion by 2025
- Investor Insight
- Retirement is the core investment driver the world over
- Table Figure 7: Investing for retirement is the most popular reason global consumers invest
- US retirees are most adventurous regarding their portfolios
- Table Figure 8: Retirees in Europe are the most risk averse, while the Americas are most exposed to variable assets
- Table Figure 9: Most consumers stick with their main checking account provider into retirement
- Retirement is the core investment driver the world over
- Competitive Dynamics in Retirement
- Over a third of global wealth managers do not offer retirement planning products
- Table Figure 10: 40% of global wealth managers are yet to offer pension and retirement planning services
- Table Figure 11: Over 50% of global wealth managers agree there is a risk of inheritors leaving their firm
- Targeting women with retirement services is critical
- Digital wealth management providers are attracting retirees
- Table Figure 12: Over a fifth of global retirees are open to digital providers managing new investments
- Over a third of global wealth managers do not offer retirement planning products
- Best Practice in Retirement Planning
- Traditional players are beginning to focus on digital retirement services
- Table Figure 13: Schwab offers a digital retirement income solution
- Table Figure 14: A multi-channel communication experience is desired by all affluent groups in the US
- Digitization of retirement services is needed to broaden access to retirement advice
- Table Retirement-related deals and partnerships, 2021
- Table Figure 15: The majority of all generations in Australia agree that tried and familiar products are more important than new ones
- Table Figure 16: Nutmeg provides pension services and collaborates with a digital will provider
- A high-tech, high-touch multi-generational retirement proposition will give providers a competitive advantage
- Table Figure 17: 60% of retirees prefer reviewing their finances and investment portfolio via digital methods
- Traditional players are beginning to focus on digital retirement services
- Appendix
- Abbreviations and acronyms
- Definitions
- Methodology
- Secondary sources
- Further reading
- About GlobalData
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