Wachovia Corp. says its retail retirement group is drawing assets by having advisers work face to face with customers at every income level to create a retirement plan.

The Charlotte company is offering its Envision retirement planning platform to brokerage clients with at least $250,000 of assets. It is offering a free 10-minute "retirement checkup" to any customer who comes into its branches.

"Our strongest value proposition is the fact that we are not just pushing people into online channels," said Lynne Ford, the director of the retail retirement group.

Wachovia has provided more than 400,000 plans to more than 40% of its customers through Envision since its inception in July 2003. Early next year the company plans to begin offering the platform to customers it inherited this year through its acquisition of A.G. Edwards & Sons Inc.

"One of the differentiators for Wachovia is our broad spectrum of clients," she said. "We want to leverage a greater cross-section of clients and not singularly focus on the high end."

A national consumer survey Wachovia conducted this year found less than half of respondents have a retirement plan, and 28% have a written budget.

Envision lets advisers develop a detailed "living plan" for clients that includes goals, priorities, and interests. Ford said it was not easy to get Wachovia's advisers to begin using the platform; her company had to develop salary and bonus incentives for them.

The retirement checkup is meant to help customers understand how to save for retirement with products like 401(k) plans, but it could be as simple as getting customer to understand how to budget their money, Ford said.

"Over a long enough period we have proven that planning works," she said. "We have had strong growth. It has been sustainable, and now we are getting adoption by our advisers."

Envision has enabled Wachovia to increase retirement assets quickly, Ford said.
According to the Michael White-Symetra Bank Holding Company Fee Income Report, its annuity revenue reached $483 million last year, and its fourth-quarter revenue rose 26% from the previous quarter, to $155 million.

Wachovia was the largest bank distributor of annuity products last year, with $12.5 billion of sales, according to the report. Since 2004 its individual retirement account assets under management have grown 13% annually, and last year inflows topped $20 billion. At the end of last year Wachovia ranked in the top five in IRA assets under management, with $225 billion.

Stressing planning provides room for growth, Ford said.

According to Wachovia's survey, 28% of respondents who are retired are drawing down 10% or more from their nest egg annually, and 50% are drawing down 5% or more. These results are concerning, since "the standard rule of thumb is not to reduce your nest egg more than 4% annually," she said.

More surprising from the survey, is that most retirees remain optimistic about how they are managing their wealth, Ford said. "People are just blind to the financial impact of their decisions."

Individuals with $1 million of $5 million of assets are at the greatest risk of outliving their savings, she said. Many have retired early and developed "out of whack" spending habits that have them drawing down their nest egg quickly. "There are a lot of issues surrounding longevity and health-care financing that are still big unknowns," Ford said. "We have to try to focus on education and awareness about financial planning."

Wachovia's annuity sales continue to increase, and IRA rollovers have grown, but Ford said there is no "one size fits all" approach for retirement savings.

"A lot of customers are very interested in using our variable annuities that have income riders, because it can guarantee money, but this is not a silver bullet," she said. "The challenge in retirement is drawdowns and ensuring that drawdowns and cash flows don't exceed certain parameters."

Michael White, the president of Michael White Associates LLC, said it is critical for advisers to help investors create a financial plan to save money into retirement. "There is so much to do in terms of balancing investments, laddering annuities, etc."

Other companies are trying to get customers to plan for retirement, and by creating a plan, advisers have the inside track toward generating business, he said.
Ford said Wachovia's approach is "to deliver age-appropriate solutions" for all its customers. "We want to engage our customers with a strong advice component and deliver the right products. The assets will follow."

Analysts said nonbanking companies, including Fidelity Investments, are creating banklike products, such as checking accounts, that are linked to an individual's retirement account.

Ford said Wachovia can offer even more products to retirees. "We do have banking products for brokerage customers that we can offer through our financial advisers," she said. "That integration of banking and brokerage has really been successful for us."

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