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Changing Demographics Should Help Stable Value Industry

The American population is getting older, and that's good news for the stable value industry-or so says Mark Goldstein, an internationally recognized authority in the field of aging and its implications for the workforce and marketplace.

Speaking at the SVIA 1999 National Forum in Washington, D.C., Goldstein explained that as people get older they usually adopt more conservative investment strategies. Because stable value funds are uniquely conservative-they guarantee an investor's principal yet generate better long-term returns than money market funds-they're a natural fit for America's aging population.

To make the most of this opportunity, Goldstein said, companies must understand the demographic trends influencing the marketplace, as well as the psyche of older Americans, including how they buy goods and services.

The great graying of America can be explained by two factors, Goldstein said. The first, and most frequently documented, is the impact of the baby boomer generation-the record 76 million infants born in the post-war era from 1946 through 1964. Those boomers are now turning 50 at the rate of 10,000 per day. The second is what Goldstein calls the "longevity revolution." Advances in medicine, hygiene and technology have added 30 years to the average human life over the past century, a feat which Goldstein says may go down as the greatest accomplishment of our time. Combine these two factors, and it turns out that two-thirds of all the senior citizens who have ever lived are alive today. And, the senior segment of the U.S. population is continuing to grow at three times the rate of any other.

The vast wave of baby boomers passing 50, Goldstein said, have clearly identifiable buying patterns. "They are concerned more with quality than price," he said. "They want to save time and effort. They are convenience driven. They want honest facts and information from sellers, not persuasion. They want consistency between the seller's promise and what the seller actually delivers. They want relationships versus transactions. They want interactive ways to get information. And they respond best to what might be called 'seller restraint.'"

Goldstein said many boomers feel too busy to think about tomorrow, and are searching for balance in their life. Many would prefer more time than more money.

"Baby boomers have created a boom in every industry they've passed through over the course of their lives," concluded Goldstein, who, when he's not on the lecture circuit, serves as North American training director for Age Wave Communications, a marketing communications firm. "Now, 80 million boomers are focusing their energy on investing in their own retirement. I suggest you take this ball and run with it."

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