Consolidation Concierges: A New Advisory Position?

Upon approaching retirement, the average investor has 3.6 financial provider relationships, Cerulli research shows. While 46% of those who have been retired between one and five years, only 11% have actually consolidated their assets.

The desire to consolidate assets declines slightly over time for retirees, with 45% of those retired between six and 10 years wanting to bundle their assets with one provider, but only 14% having done so. Among those retired more than 10 years, 42% would like to consolidate their accounts, but only 18% have done so.

Cerulli examined the reasons why investors resist consolidating assets, finding that some may just not trust their adviser—or they want to diversify assets among various providers. They may think that combining their assets into one account is too cumbersome, or they may not be aware of the services available from their various providers are broad enough that they could fulfill all of their financial goals.

Cerulli recommends that advisers explain to investors the risks involved with having multiple accounts—as well as the pricing and service benefits of working with a single provider. Cerulli also says that advisers should make the process of consolidating assets easy for investors, that they should offer them the “path of least resistance.”

Cerulli notes that if an investor has multiple accounts, he or she may not share information about these accounts with their adviser. “For example, an investor withholding the existence of $100,000 invested in certificates of deposit at a local bank could result in the advisor recommending an earlier start to receiving Social Security distributions,” says Scott Smith, a director at Cerulli.

Cerulli also notes that if an adviser is aware of all of an investor’s assets, he or she would be in a better position to recommend retirement income and/or asset preservation solutions.

Cerulli’s research found that the two biggest goals of retirees are protecting their current level of wealth, cited by 41%, and assuring a comfortable standard of living in retirement, cited by 39%. Among working investors, these two factors were cited by a mere 15% and 27%, respectively.

Cerulli says that to simplify the process, advisory practices should consider creating a new position: consolidation concierges.

Information on how to order Cerulli’s full report is here.