The "Mass" Market Has Very Little To Spend Hot

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Out of the people that insurance industry umbrella group LIMRA talked to, a full 30% say they can't afford to invest anything at all, which knocks them out of the running for any asset-based compensation program -- or arguably, most high-end financial planning until the budgeting and cash management basics have been squared away.

And 83% of the population say they can only invest $3,000 or less a year. That probably wouldn't generate much for commission-dependent advisors either.

Of those who say they've worked with a financial advisor, the median account balance looks like it's about $50,000. This is not a lot of money when you consider that a typical RIA may charge 0.75% of assets under management at this level, you're still looking at $375 a year -- gross revenue -- to manage one of these accounts. Gather about 200 of them, and you might be able to start making a decent living.

Only 19% of the people working with advisors say they have more than $250,000 on the books, which is where they start to become interesting to the typical advisor.

While existing compensation models may never make it viable for advisors to spend most of their time with these people, there are ways to give back to this 83% of the population that is often ignored. Advisors can host cash management seminars or retirement awareness programs in conjunction with local 401(k) sponsors. After all, these people may not be the ideal client at the moment, but they may know -- or become -- someone who is.



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