A year-old MassMutual Financial Group unit serving retiring baby boomers hopes to attract more assets with RetireMentor, a product that uses both funds and annuities to provide clients with income after they retire.
RetireMentor was created by Golden Retirement Resources Inc. of New York. On Monday, MassMutual announced it had bought a majority interest in the privately held company (the price was not disclosed) and said it intends to buy it outright by yearend.
Golden Retirement is now the income management strategies division of MassMutual and part of the income management group started a year ago. Jerry Golden, who created Golden Retirement six years ago, has been named the president of the income management strategies division.
Spencer Williams, a senior vice president with the Springfield, Mass., company and the head of the income management group, said MassMutual plans to pitch RetireMentor to middle-market and mass affluent baby boomers. He described the fee-based product as a "cousin to managed accounts."
"We want to execute everything for individuals after they retire with one account, one statement, and one check," Mr. Williams said.
According to Forrester Research, there are about 20 million U.S. households with people near retirement who have accumulated $100,000 to $1 million of retirement assets.
Analysts said RetireMentor is similar to the Fidelity Income Management Account, which the Boston fund company unveiled in October as an addition to the Retirement Income Advantage program it started in June 2004.
The Fidelity product is designed to help retired investors monitor and manage their retirement income, make more informed investment decisions, and control their spending. It provides customers with a single view of all of their Fidelity and non-Fidelity accounts, and allows investors to invest in Fidelity accounts.
Mr. Williams said RetireMentor differs from the Fidelity offering by bringing annuities and mutual funds together. (MassMutual has an affiliate provides annuity products and is the parent of OppenheimerFunds.)
Jennifer Engle, a spokeswoman for Fidelity, said its offering is "not an investment product, it is an account. It's a specially designed cash management account with special features for retirees." Comparing the two is comparing apples and oranges, she said.
Mr. Golden said RetireMentor combines the stability of annuities with the investment opportunities available with mutual funds. It is also flexible, he said, which is crucial because "poor market conditions can have a devastating effect on an account that is designed for distribution rather than accumulation."
Mr. Williams said he believes RetireMentor has enormous potential. "Jerry is bringing us strong intellectual property and we have the products to back it up," he said.
Mr. Golden, who was an executive vice president of the Equitable Life Assurance Society before starting Golden Retirement, said RetireMentor is flexible enough that MassMutual could roll it out globally by the end of the year.
"We want to deliver these products in a system where the average American can get these services," Mr. Golden said.
He added, "I think we will be pleasantly surprised that this will attract investors with more than $1 million too, but it has the efficiency to be able to attract the middle market and the mass affluent, as well."
