We recently did an annual study, 2010 Food & Health Survey: Consumer Attitudes toward Food Safety, Nutrition, and Health, for the International Food Information Council Foundation (IFIC), which examines what Americans are doing regarding eating and exercise, health habits, and food safety practices.

The report immediately picked up a lot of press coverage, especially regarding American’s perception of calories, weight and obesity.

Here are a few of the articles featuring the report:

• USA Today: Many Americans clueless of how many calories they do or should eat
• The Consumerist: Only 12% Of Americans Know How Many Calories They Should Eat Each Day
• Newsmax Health: Calorie Equation Confounds Dieters
• Art’s blog: Clueless in Calorie-Land
• HealthNews: Ignorance Is Not Bliss: Know Your Calorie Count

You can find more info and the full report on IFIC’s website.

The crisis that impacted the financial environment last year has escalated the need for informed decision-making. To leverage all knowledge assets more efficiently, companies are strengthening the ties between marketing research (MR) and competitive intelligence (CI) and seek to obtain a birds-eye view on their business and the marketplace. Yet, as industry players continue to face increased financial constraints, understanding markets or competitors and uncovering insights about products and services has never been more challenging.

However, a successful integration between traditional marketing research and competitive intelligence cannot be successfully accomplished by simply merging business units or mandating collaboration among internal teams. Success comes only with the understanding that these two distinct disciplines have numerous synergies that can be leveraged and put to work, while also recognizing some key differences.

Marketing research focuses mainly on understanding the customer, measuring attitudes, preferences, satisfaction, loyalty and behavior. Competitive intelligence focuses on understanding and learning about the competitors, trying to assess their ability to succeed and identify key strategies.

While both disciplines are predictive in nature, the approach in which they predict is different. Marketing research seeks to predict customer behavior based on trends and inferences backed up by statistical analysis and confidence levels given by large samples. Competitive intelligence aims at predicting competitor moves and strategies based on early warning systems and subjective interpretation of cues and changes in the marketplace.

Both marketing research and competitive intelligence rely on primary and secondary data collection techniques such as in-depth interviews, observation, web searches and others, but the targeted samples differ. While marketing research relies on large samples with the goal of building confidence and generalizing findings to the larger population, competitive intelligence is highly subjective and more often than not relies on small samples that can provide the needed information.

Marketing research can be seen as both an art and a science, requiring practitioners to have good project management skills, advanced statistical analysis knowledge and expertise in data collection and reporting. Competitive intelligence is certainly more of an art as it relies on practitioners’ industry expertise, business knowledge, intuition and strategic mindset.

Trying to merge these two disciplines may pose several challenges in a business, especially if there is no clear understanding and delineation between what each group and function can bring to the table to support confident decision-making. To avoid such problems, it is helpful to facilitate closer collaboration and coordination of efforts from early on, and most importantly share resources among teams. Clear job descriptions, realistic expectations, support from higher management and appropriate resource allocation will go a long way toward building a stronger organization. Communication, sharing and capability building are the key drivers of a successful integration of marketing research and competitive intelligence.

Cogent Research is pleased to introduce the inaugural edition of Retirement Planscape™. This new Perspective Series report is a comprehensive examination and view into the world of today’s defined contribution retirement plan sponsors—from their present concerns about the economy and well-being of their employees to their engagement and satisfaction with the intermediaries, asset managers, and providers that service their plans.

Retirement Planscape™ is modeled after our Investor and Advisor Brandscape™ reports, and thus provides custom-quality, market-level competitive intelligence and critical brand-tracking metrics in a powerful syndicated research package. In addition, the report includes insightful industry commentary and provoking thought leadership, based on Cogent’s 15 year history of providing custom research solutions to both institutional retirement and retail-focused clients in the financial services industry.

The report findings indicate that a wide gap exists in knowledge and sophistication among plan sponsors, especially between the owners of micro plans for whom a 401(k) is just one of many responsibilities and the dedicated retirement specialists in mid-sized and large companies. Needless to say, retirement plan providers serving these myriad organizations have very different sets of challenges (and opportunities) depending on their market focus. Furthermore, for the increasing number of providers that service the entire range of plan sizes or those seeking to enter a new market segment, navigating such waters can be tricky, and, as this report reveals, seldom entirely successful. Chief among the obstacles impeding progress is a lack of clear brand differentiation among most retirement plan providers.

Regardless of their sophistication or level of engagement, all sponsors face the common challenges of managing plan costs, boosting enrollment, and expanding plan features and investment options. Retirement Planscape™ will help plan providers prioritize those areas where sponsors need the most help, and for asset managers and other product providers identify optimal pathways for increasing platform penetration.

Click here to learn more about Retirement Planscape™.

While the financial services industry has been busy courting the in- or near- retirement Boomer generation, an emerging wave of younger, affluent investors has been silently growing, building wealth, and seeking financial services firms who will give them what they want. This group of Generation X thirty and forty somethings comprise about one-fifth of affluent investors in the United States and bring a unique perspective to the financial landscape. Asset managers, product manufacturers, and financial intermediaries alike should take note – the need to understand and adapt to the Generation X investor will be increasingly critical as the population ages and a new investor emerges. Generation X represents a significant opportunity in the current environment, and the smartest firms will realize that these investors bring the promise of wealthier and more profitable customers in the next decade.

Not surprisingly, the characteristically cynical group of Generation Xers is more than indifferent to the investment landscape ahead of them. For over a decade, they have been warned that they will not reap the benefit of Social Security as did their parents and grandparents. They’ve been exposed to the housing bubble and tech-bubble collapses of the nineties, the nightmare stories of day-traders, the economic upheavals that followed 9/11, the near historic collapse of the finance system, and the current global credit crisis that continues into this latest downturn. This cynicism certainly extends to the financial services arena. When compared to older generations, Generation X investors are consistently less satisfied and loyal – less than two-thirds are so-called “promoters” of the distributor that holds the lion’s share of their investable assets. Clearly, this does not bode well for the future as these affluent young investors are likely to be tomorrow’s millionaires.

Where are Distributors Disconnecting with Generation X?

In general, distributors have done a good job of addressing one area where Generation X places more importance than older investors – online capabilities. As important to these younger investors as portfolio performance in driving distributor loyalty, Generation X investors tend to rate their primary distributor higher than other investors on attributes such as “online trading functionality” and “web site investment planning tools.” But online functionality is not the end-all of what drives this Generation’s loyalty. Beyond these attributes, Generation X tends to be less satisfied with their primary distributor on most other dimensions. In particular, perceptions regarding distributors’ financial stability, long-term portfolio performance, and quality service (including accuracy of executions, quality of advice, service and support) garner the largest gaps in satisfaction from the younger set. No doubt influenced by the environment in which they’ve matured, it is clear that Generation X investors place more emphasis on, and want better evidence of, security and accuracy from their distributors.

Perhaps as important to Generation X investors as stability and quality is having a wide selection of investment products and services to choose from. Here again, younger investors generally indicate lower levels of satisfaction with their distributor than older generations. Distributor performance ratings for “range of investment products” and “range of investment services” tend to be rated much lower by younger investors.

A Convergence of Challenges?

While it is certainly not surprising that Generation X investors, more skeptical and concerned with security and stability than generations before them, are more likely to work with online distributors that provide them control and access, it does present a major challenge. These investors are still not satisfied with the financial stability, breadth and quality of these offerings, leaving the industry with some difficult questions to address:

• What is an ideal messaging strategy that addresses younger investors’ concerns and skepticism?
• What is the right balance to strike between empowering individual investors to take a more active role in their investment planning (through online tools and services), and offering competitive levels of personal service that grow brand loyalty – such as advice and guidance?
• How do the more online-advanced firms, such as e*trade, Scottrade, and others, leverage their competitive advantage while also meeting investors’ appetite for security, stability and long-term performance?

About Cogent Research’s Syndicated Report: The NeXt Generation of Millionaires™
For more information about the Generation X affluent investor mindset including behaviors, attitudes and perceptions, as well as how distributors, mutual fund, variable annuity, and ETF providers perform with this critical segment, check out Cogent Research’s The NeXt Generation of Millionaires™, available in June.

Our latest report concludes that retirement plan sponsors’ needs and priorities vary significantly by plan size, and providers that succeed in delivering in these specific areas enjoy stronger loyalty among the plans they service. This and many other findings are contained in Retirement Planscape™ 2010 – an extensive industry report which is based on a nationally representative survey of 2,193 401(k) sponsors in the U.S.

Among micro-plans – that is, groups with under $5 million in plan assets – it turns out that across seven core areas of service delivery, the area of administrative support is the most critical driver of sponsor loyalty. Meanwhile, for plans with between $5 million and $20 million, a much broader set of needs and concerns come into play, including plan participation support, fees, and administrative support. Finally, among larger plans – those with more than $20 million in asset – the ability of retirement plan providers to help sponsors with participant communications and problem solving has a critical impact on loyalty.

“These findings reflect the day-to-day realities that sponsors face across the full spectrum of plan sizes,” said John Meunier, Cogent Principal. “At the most basic level, micro-plan sponsors need help getting their plans up and running. As plan assets grow, so too do sponsor needs, not only to manage the plan but participants and costs as well. And when we’re talking about the biggest plans, it’s more about accountability to stakeholders, and keeping the plan and participants on track.”

Among ten leading providers serving the micro-plan market (<$5 million), Bank of America Merrill Lynch achieves the highest loyalty rating with sponsors it currently serves, followed by ING and Mass Mutual. Among eleven leading providers serving small plans ($5-$20 million), Fidelity Investments achieves the highest loyalty rating, followed by Principal Financial Group and Mass Mutual. Finally, among ten of the biggest providers serving plans with more than $20 million in plan assets, Vanguard earns the highest loyalty ratings from sponsors it serves, followed by Charles Schwab and Fidelity. The loyalty rankings for the leading providers by plan size are as follows:

“These results clearly illustrate how difficult it is for any single provider, even giants like Vanguard or Fidelity, to garner top loyalty ratings across multiple segments,” said Meunier. “Each market is a different ball game, and there are clearly niche players capitalizing on unique strengths in each arena.”

We are pleased to provide a free whitepaper named RIA Channel Overview! Data is based on our Advisor Brandscape™ 2009 report, which surveys over 1,500 financial advisors in the US. The 26-page e-book contains in-depth comparison between the RIA channel, and the National, Regional, Independent and Bank channels.

Information includes:

• Assets under management (AUM)
• Satisfaction with firm
• Potential future channel landscape
• Client demographics
• Product usage
• …and so much more!

Click here to download the free whitepaper!

We are currently in the process of writing Advisor Brandscape™ 2010, due to be released in July. So if you like the whitepaper and are looking for more updated data and competitive intelligence on the financial advisor market, contact Sean or John at info@cogentresearch.com.

For the first time since Cogent Research has been tracking investor allocations, wealthy Americans now hold more assets in IRAs than in workplace-based retirement accounts like 401(k)s and 403(b)s.  This and other findings are included in our new report, 2010 Investor Assets in Motion: IRA & Retirement Marketplace Opportunities, scheduled to be released next week.

The report, based on a nationally representative sample of 4,000 affluent and high net- worth Americans, found that while ownership of both types of retirement accounts is down since 2006, ownership of workplace-based retirement accounts have decreased much more dramatically.  Since 2006 IRA ownership has slid by just 5%, meanwhile ownership of workplace-based retirement accounts has decreased by almost one quarter (23%).

It appears that the majority of dollars that investors formerly allocated to ESRPs have been funneled into IRA accounts and, to a lesser extent, bank accounts.  This shift has resulted in the proportion of assets affluent Americans hold in IRAs (31%) to surpass the proportion of assets they hold in 401(k) and other employer-based retirement plans (25%).

“The good news here is that while many Americans are losing access to 401(k) plans as a result of job separation, choosing to bypass their 401(k)s, or simply retiring they are making smart decisions regarding where to move their money – namely putting it in an IRA.” said Meredith Lloyd Rice, Cogent Senior Research Director and author of the study.

Furthermore, it appears that the rollover momentum will continue.  While fewer investors may have assets sitting in former employer retirement plans today (24% in 2009 vs. 31% in 2008), those who still do are even more likely to plan to rollover those assets into an IRA (45% in 2009 vs. 39% in 2008).

According to Rice, recent legislation making it possible to convert traditional IRAs into Roth IRAs has the additional potential to intensify the race by industry to capture IRA rollover assets.  “Given this new legislation and what investors are telling us, there has never been a better time for an investment firm to put more muscle behind their company’s rollover strategy.”

An analysis of nineteen leading distributors reveals several big winners in the ongoing race to attract IRA assets. On average, over the past year firms managed to increase the proportion of primary client assets held in IRAs accounts by 15%.   Besting their peers, seven firms were able to successfully increase the average proportion of primary client assets in IRAs by twenty percent or more.  Those firms include: Fidelity, ING, Merrill Lynch, Raymond James, USAA, Vanguard, and Wells Fargo Advisors/Wachovia.  Overall, nine firms hold one third or more of their individual primary clients’ assets within IRA accounts.  These firms include: Ameriprise, Charles Schwab, Edward Jones, Fidelity, LPL, Merrill Lynch, Raymond James, UBS, and Vanguard.

Top firms increasing primary client assets held in IRAs

As competition continues to increase in the wealth management industry, discovering new sources of customers has become more important than ever. Moreover, as a sizeable portion of affluent Americans are on the cusp of moving into a de-accumulation phase, the motivation to attract younger investors is stronger than ever. Firms that are successful in attracting the new wave of affluent investors (those born after 1981) will be challenged to meet the needs of a generation that is vastly different from its elders.

First, one in three (32%) affluent Gen Y investors do not have assets in an employer-sponsored retirement plan and one in four (27%) do not have an IRA. Given the fact that most of Gen Y are employed – with substantial incomes – it seems less likely that they don’t have access to a 401(k) and more likely that they are choosing not to participate in their employer’s plan. Indeed, Generation Y investors are more likely than any other generation to hold a high concentration of their assets (28%, on average) in bank accounts.

Gen Y’ers do invest, however, and when they do, they are more likely than others to own individual stocks and bonds. Furthermore, Gen Y are also significantly more likely to own alternative investments such as exchange traded funds, separately-managed accounts, and hedge funds.

The majority (61%) of Generation Y investors consider an online distributor to be their primary relationship, with E*Trade garnering the highest share of relationships (15% vs 3% among all investors), followed by Charles Schwab and Fidelity. Second to online distributors is the bank channel (which again is a clear departure to other, older generational segments), with one in four young investors (25%) considering a bank their primary distributor.

Continuing the trend of independent behavior, Gen Y investors who are advised are more likely than older investors to retain control of a majority of their own assets.

Currently, Gen Y investors have less than half of their assets (48%) managed by their primary advisors compared to 61% for the average investor.

Perhaps most striking about Gen Y’s investing behaviors is their general aversion to risk. While an increased allocation to more conservative investments may be appropriate for older investors, younger investors have a longer time horizon to weather the storm. Currently, younger affluent investors place over a third (36%) of their assets in low risk, guaranteed return products which is almost on par with Silent Generation investors who allocate 40% of their assets to these products.

Article refers to data from the latest Cogent Research Perspectives report, Investor Brandscape™ 2010, released January 2010.

Retirement Income Product Innovations Not Resonating with Retirees and Pre-Retirees

Press Release: CAMBRIDGE, MASS., (March 12, 2010) – Despite a proliferation of retirement income products and financial services firms’ best efforts to capture the retirement income market, no single leader has emerged in this coveted space. Cogent Research’s new In-Retirement Income™ 2010 report explores familiarity and interest in retirement income products among today’s affluent retirees and pre-retirees, revealing a vacuum for both a winning product and a clearly identified leading provider.

According to the report, today’s affluent pre-retirees and retirees are most interested in managing their retirement income through traditional CD or bond laddering strategies implemented by themselves or through advisors. Variable annuities are second in familiarity and interest, while more recent innovations such as target payout and absolute return funds earn very little interest.

“We’ve found a variety of factors responsible for this seemingly rudderless market, not the least of which is the incredibly high expectations of today’s retirees and pre-retirees,” said Cogent Principal and co-founder Christy White. “In theory, pre-retirees love the idea of a guaranteed paycheck, but in reality they are unwilling to give up control of their principal for too long – and certainly not forever.”

Pre-retirees are, however, willing to make other sacrifices to have the type of retirement they want, including delaying retirement, saving more, and continuing to work while in-retirement. In fact, nearly half of all affluent pre-retirees (49%) say they will continue working in-retirement to augment their income, while less than one-quarter (24%) of current affluent retirees rely on employment income. In all, pre-retirees expect to draw on 7.5 sources of income in retirement, and they expect to tap those resources much earlier in retirement than did their retired peers.

Retirees’ and pre-retirees’ lukewarm response to retirement income products is reflected in their indecision regarding which firm is the “best” among retirement income providers. No one firm was chosen by more than 10% of survey respondents, with the largest percentage of respondents saying they “don’t know” (26%). Furthermore, when asked to name the company they would be most likely to consider when purchasing a retirement income product, more than 30 different firms were cited, again with no single firm earning more than 10% of the vote – although Fidelity Investments and Vanguard did enjoy nods from one in six pre-retirees and self-directed investors. Well-known brands, including Wells Fargo, Morgan Stanley Smith Barney, Edward Jones, Charles Schwab, Ameriprise and Merrill Lynch were cited by 5% or less.

For now, past experience (already use and like them) is more of a determining factor behind selection than expertise in retirement income planning. “While this level of confusion and indecision around retirement income products and providers is no doubt disheartening to providers, it’s also an exciting opportunity for the firm or firms who eventually get it right,” says Carrie Merrick, Project Director at Cogent Research, and author of the study.

Cogent Research’s In-Retirement Income™ 2010 aims to help retirement income product providers maximize asset-gathering among retirees and pre-retirees by determining awareness of and interest in various types of retirement income products, barriers to increased interest, and the messaging and benefits of retirement income products that most resonate with retirees and pre-retirees. Data for the study was collected via an online survey among a representative sample of 961 retirees and pre-retirees with a minimum of $100,000 in investable assets.

About Cogent Research. Cogent Research helps clients gain clarity, obtain perspective, and formulate direction on critical business issues. Founded in 1996, Cogent provides custom research, syndicated research products, and evidence-based consulting to leading organizations in the financial services and life sciences industries. Through quality research, advanced analytics, and deep industry knowledge, Cogent Research delivers data-driven solutions and strategies that enable clients to better understand customers, define products, and shape market opportunities in order to increase revenues and grow the value of their products and brands.

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Media Contact:
Carrie Merrick, Project Director
617-715-7622 or cmerrick@cogentresearch.com

The distributor landscape was changed forever in late 2008 and early 2009 with the acquisition and merger activity of industry heavyweights including Merrill/Banc of America, Wells Fargo/Wachovia Securities, and Morgan Stanley/Smith Barney. Indeed, for industry followers, the mergers of traditional banks with Wall Street brokerage and wealth management firms are likely to cause the extinction of the “wirehouse” channel. While, the past 16 months has resulted in lots of shareholder meetings, lawsuits, and never ending correspondence to affected customers, the mega firms have performed well in our CoRe Score metrics, reflecting that clients and prospects alike see brighter days ahead for these key industry players.

Banc Of America/Merrill Lynch
Of the three major mergers, the new Banc of America has seen the most improvement. The firm moved up to Player status from the Drifter category in 2008. Banc of America’s rise is primarily due to an increase in its ownership score where the bank advanced from 20th to 12th in rank, overall. However the firm must shore up revenue potential by continuing to seek clients with higher investable assets or refer large retail depositors and banking business clients to Merrill Lynch advisors. Meanwhile, Merrill Lynch has retained its “Star” status, and has seen increases in customer loyalty from 2008, perhaps reflecting strong retention activities from Merrill Lynch financial advisors.

Morgan Stanley/Smith Barney
As Cogent Research proclaimed “last man standing” in the wirehouse channel in late 2008, Morgan Stanley was not only able to keep its strong overall CoRe Score™ “Star” rating, it also appears the firm is focused on creating synergies with former Smith Barney advisors and divisions. Recently, the firm announced that it will have an even stronger focus on the ultra high net worth ($20M+) investor with the integration of the former Morgan Stanley Private Wealth Management division with Citi’s former Family Office entity. Thus, the new Morgan Stanley Smith Barney has wasted no time in seeking complementary skill-sets in its quest to gain share from rivals. Further and seamless integrations like this will be important as the firm works to improve customer loyalty scores, where it ranks in the third quartile overall, and behind firms like Edward Jones that constantly promotes its own strong customer satisfaction scores.

Wells Fargo Advisors/Wachovia Securities
Based on this year’s CoRe Score™, the newly combined Wells Fargo Advisors has gained ground relative to the stand alone scores for Wells Fargo in 2008. While Wachovia ranked as a Leader in 2008, Wells Fargo was in the Player category. This year the new entity is in the Leader category due to large gains in brand equity and ownership. However, the firm needs to focus on increasing customer loyalty where it ranks in the Drifter category and 17th overall. This is a dramatic decrease from the number 10 ranking held by Wells Fargo independently in 2008, but slightly better than the 21 rank achieved by Wachovia during the same time period.

Article refers to data from the latest Cogent Research Perspectives report, Investor Brandscape™ 2010, released January 2010.