A research report on health savings accounts released Thursday by TowerGroup in Needham, Mass., says the biggest investment management opportunity for financial institutions may be limited to extending relationships with businesses and consumers.
The company projects that the total of health savings accounts, or HSAs, and flexible spending accounts, or FSAs, will rise to nearly 29.1 million by 2010, from 17.3 million this year. (The research firm has previously projected growth of HSAs alone to 1.88 million by yearend and 6.2 million by 2010.)
TowerGroup predicts HSA assets under management by all financial companies will grow to between $10 billion (assuming an average individual net annual contribution of $300) and $26 billion (assuming a $750 annual contribution) by 2010. But it said it sees a natural limitation on both the number of accounts that will be established and the level of assets likely to be saved per account holder.
Ultimately, TowerGroup said, it believes the greatest HSA opportunity may be for diversified banking institutions with custodial and card-issuing capabilities or alliances to extend relationships with businesses, including employers and health-care providers, as well as consumers.
