How Valuable is the Average 55 Year Old Prospect to a Financial Advisor?

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To effectively communicate and provide financial advice, an advisor must understand their client. But because every individual and household is so different, it's often most practical for advisors to focus on specific client niches, or common characteristics and attributes that their target demographics share. This can help consolidate marketing resources and communications more efficiently, allowing an advisor to speak more directly to the needs and concerns of their clients and prospects, thus strengthening their position among advisors competing for the same client assets.

Those preparing for imminent retirement are a common demographic among financial advisors, as they are often at the peak of their earning power and may have above-average financial strategy needs due to their impending transition from building wealth to enjoying it. By age 55, individuals should be planning their imminent retirement.

But, who is the average 55-year-old consumer? What do they have, what do they want and what do they need from their financial advisor?

This paper explores the numbers and stories that describe the average member of this cohort, including their net worth, income streams, and the historical financial journey that has shaped the economic psyche of this age group. Using this information and SmartAsset's proprietary model valuing the planner-client relationship, we'll discover how much a financial advisor could potentially be worth to a 55-year-old, and conversely, the value they can bring to your practice.

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As an individual, the median 55-year-old makes around $65,936 per year ($1,268 per week). Households headed up by a 55-year-old tend to be somewhat higher-income. These have a median income of around $82,150 per year. The difference, generally, reflects the additional income of households with multiple individuals and earners.

A median 55-year-old tends to have a net worth of around $364,270. This reflects their assets over liabilities, and this cohort tends to have largely paid down their debt. A median individual in this cohort has assets of around $473,500.

This cohort is also moderately liquid. A median 55-year-old will have median cash or cash-like holdings of around $67,700 while holding unsecured credit card debt of around $3,500. This gives them significant spending power. Most of their debt is held in secured, structured notes such as mortgages.