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Financial firms target USD3.4trn held by US retail investors in cash equivalents at banks


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Financial firms are targeting USD3.4 trillion held by US retail investors in cash equivalents at banks, according to research by Cerulli Associates.

"On average, 10.8 per cent of all households' financial assets are in cash equivalents at a bank," says Scott Smith, director at Cerulli. "This includes money market accounts, savings accounts or CDs."
 
Cerulli's latest report, US Retail Investor Products and Platforms 2014: Matching Product and Distribution Strategy to Client Demands, is designed to help product manufacturers and distributors understand retail investors' product preferences, product use, and product needs to better inform product development and distribution initiatives. Data includes product market sizing, distribution market sizing, investor profiles, and investor product use.
 
"It is standard recommendation, although not always followed, for households to keep at least six months' worth of expenses in a savings account for emergencies," Smith says.
 
Cerulli believes this is responsible action, but many households accrue cash equivalents far in excess of this minimum.
 
"Bank providers can use this as an opportunity to educate customers about the range of products they offer outside of traditional banking services, which could offer more flexibility to the client and the firm," Smith says. 

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