Baby boomers by the numbers
* Baby boomers number more than 76 million and control more than $7 trillion in wealth. * Boomers are expected to inherit an estimated $12 trillion from parents and relatives. * Three out of five retirees say they retired before they planned to, and the No. 1 reason was failing health. * Seven out of 10 pre-retirees say they would "like to include some work in their retirement years." * 52 percent of people over 45 years old say they plan to provide support to family members. * Of affluent households with more than $1 million in invested assets, 92 percent have $1 million to $5 million, 5 percent have $5 to $25 million, and 1 percent have more than $25 million. * Only 60 percent of baby boomers say they have any retirement savings. * More than a third of baby boomers don't expect to retire before age 70. * Retirees will account for up to 25 percent of the U.S. population in coming years. * Baby boomer wealth is concentrated, with the richest 10 percent holding 90 percent of the wealth. Sources: Merrill Lynch Retirement Study, WealthEngine, CNBC, Gallup, Vanguard
Chattanooga area investment advisory firms
SEC-registered investment advisory firms in Chattanooga include: * Barnett & Co Inc., 1300 Broad Street, Chattanooga * Bellwether Investment Group, LLC,6778 Executive Oak Lane, Chattanooga * Brooks, Moore & Associates, Inc., 3905 Saint Elmo Avenue, Chattanooga * Campbell Asset Management, LLC. 301 Forest Avenue, Chattanooga * Councilmark Asset Management, LLC Dome Building, Suite 401 736 Georgia Avenue, Chattanooga * Cox Wealth Management, LLC 6031 Shallowford Road Suite 109, Chattanooga * Demoss Capital, Inc. 25 East Main Street Suite 201, Chattanooga * Evergreen Advisors, LLC 1206 Pointe Centre Drive Suite 160, Chattanooga * Garth & Brown Investment Management, LLC 819 Broad Street, Chattanooga * Gibson Gaither Wealth Management Advisors 1612 Gunbarrel Road Suite 103, Chattanooga * Guardian Wealth Management, Inc. 6151 Shallowford Road Suite 102, Chattanooga * HHM Wealth Advisors, LLC 1200 Market Street, Chattanooga * Pantheon Investment LLC 735 Broad Street Suite 200, Chattanooga * Patten And Patten, Inc. 520 Lookout Street, Chattanooga * Pointer Management, LLC 735 Broad Street Suite 1108, Chattanooga * Pronvest, Inc., 1203 Carter Street, Chattanooga * Provident Investment Management LLC, 1 Fountain Square, Chattanooga * River Associates Investments, LLC, 633 Chestnut Street Suite 1640, Chattanooga * Southport Capital, Inc., One Union Square Suite 300, Chattanooga * Templeton & Phillips Capital Management, LLC, 633 Chestnut Street Suite 820, Chattanooga * Tenth Street Capital 901 Tallan Building, Two Union Square, Chattanooga * The Patten Group, Inc., 832 Georgia Avenue Suite 360, Chattanooga * TSW II Capital Advisors, LLC, 736 Market Street Suite 1400, Chattanooga * Wealth Preservation Advisors, 832 Georgia Avenue, Chattanooga Source: Invstment Advisor.com
As the baby boomer retirement wave crashes onto the shores of Chattanooga's financial services sector, area money managers are angling to claim their share of the estimated $7 trillion in wealth held by America's 76 million boomers.
Much has been made of the fact that millions of boomers are unprepared for retirement - only about 27 percent are confident they will have sufficient funds to retire, according to a CNBC poll. But the retirement wave is unstoppable whether baby boomers acknowledge it or not. A recent Merrill Lynch retirement study shows, for example, that three out of five retirees say they retired earlier than expected. (Most due to health problems.)
But millions more Americans are on the verge of rolling over sizable 401(k) balances into investment accounts that must sustain them through years - if not decades - of retirement. Less talked about is the estimated $12 trillion in wealth that baby boomers stand to inherit from their Greatest Generation parents.
And it's not just money management help the boomers seek. They also want advice on estate planning, insurance and charitable giving. The financial services industry - including traditional brokerage firms, fee-only financial planners, bank trust departments and even insurance companies - have been gearing up for this investment bonanza for years.
"I've been doing this for 30 years and they've been saying: It's coming. It's coming," says Barton Close, a vice president of the Raymond James branch in Chattanooga.
Well, it's here.
How big is the wave? Consider, a baby boomer somewhere in America turns 60 years old every eight seconds.
Although baby boomer wealth is highly concentrated - with 10 percent of boomers holding about 90 percent of the invested assets - that's still potentially more than 7 million high-net-worth people in need of investment services.
Close says this is actually the second big wave of investment clients that has hit during his tenure. The first came in the late 1980s and early 1990s when much of corporate America divested itself of so-called defined-benefit retirement plans - which paid a set monthly amount - and turned instead to defined-contribution plans in which employees are responsible for making investment choices for their own retirement assets. In the 1980s and 1990s, many employees received lump-sum payouts from their pension plans that had to be reinvested elsewhere.
Through an acquisition and organic growth, the Raymond James branch in Chattanooga has doubled in size in the last five years, says Diane Guffey, branch manager.
"We are at 24 advisers, and a decade ago there were 10 or 11," she says.
Close adds: "As a firm we have seen average assets per advisor up over 400 percent. The size and quality of the business has gone up dramatically."
Carol George, the managing director of Merrill Lynch for the Tennessee Valley region which includes Chattanooga, Knoxville and Huntsville, says her eight offices will experience about 10 percent hiring growth this year alone.
At the strategic planning level, Merrill Lynch has been preparing for the baby boomer retirement wave for years, she said. She said a new strategy called "ML Clear" offers a full suite of services to retirees. The program takes a holistic approach to financial services that includes finances, family, health, home, work, leisure and giving.
"We are not the stock brokers of the old days," George said. "We are helping people manage their money, and also their lives."
Many retirees today are seeking full-service financial services firms after years of do-it-yourself investing through such online investment companies as TD Ameritrade and Fidelity Investments, she said.
"(Clients) want help. They want advice," George says. "They want someone to help guide them through what they will face."
George said that longevity trends, economic uncertainty and diminished government entitlement programs are raising anxieties among retirees and pre-retirees. In turn, Merrill Lynch is trying to address these worries through a team concept that brings together money pros and advisers with different areas of expertise.
Retirees looking for a simple, transparent fee structure for their investments may well seek out a fee-only planner such as David Hodges of Integra Wealth, who charges by the hour for investment advice or about $1,500 to $2,500 for a multi-faceted financial plan tailored to a client's unique circumstances.
Hodges, a certified financial planner, says he receives most of his customers through referrals from area CPAs and family lawyers.
"Baby boomers, with the advent of the Internet, are getting more educated about the whole investment process," Hodges said. That information includes a growing awareness about what money managers charge for their services.
James Stewart mans one of the 12,000 Edward Jones offices nationwide representing more than 7 million clients. He says two of the most important services money managers provide are helping customers identify their risk tolerance and helping them make sure that their money lasts throughout their retirement years.
"Most of the people with whom we meet for the first time want to know how to make their money last (while) limiting risk associated with reward," Stewart says.