Slow and steady for boomer advisers

Financial advisers shouldn’t focus on the big picture idea of 78 million baby boomers charging toward retirement, but should instead think of the next few decades as a gradual and steady evolution in the financial services industry. This was the gist of what Oppenheimer Funds economist Brian Levitt told advisers yesterday at the Financial Planning Association’s annual conference. “The demographics just don’t point to the boomers all moving as one homogenous group,” he said. “From a financial services standpoint, that idea is overblown.” Mr. Levitt joined other members of New York-based Oppenheimer Funds in looking beyond many of the top-level assumptions with regard to the aging baby boomer population. While much attention has been placed on the migration of baby boomers into retirement, sparking concerns over massive liquidity events and the challenges of managing retirement income strategies, Mr. Levitt pointed out there are about 45 million baby boomers who have not yet even turned 50 years old. “The trailing edge of the boomers is made up of people who are still in their 40s,” he said. “These people still have kids at home, so they’re not going to start selling off their portfolios and moving everything into bonds.” It is a mistake, he said, to think of the baby boomers as a single demographic population. “Boomers overall control 70% of the nation’s wealth, but 10% of boomers control two-thirds of all boomer wealth,” he said. Insufficient retirement assets is just one of the reasons a lot of baby boomers will keep working well into their 60s and 70s, he said. “They are living longer and working longer,” he said, citing an internal survey that suggested 50% of baby boomers expect to retire after the age of 65. This compares to an Oppenheimer Funds survey of current retirees that showed 55% of that group retired before the age of 60.