TowerGroup Research: D2D Fund Offers Opportunity for Low-Income Households, New Revenue Source for Financial Institutions

May 9, 2006; 07:22 AM

NEEDHAM, Mass. - Low-income households have historically attracted little attention from financial services institutions. New research from TowerGroup finds that the non-profit organization D2D Fund (Doorways to Dreams) is taking an innovative approach to bringing affordable financial services to low-income households, by developing a Web-based system where participants can build assets using Individual Development Accounts (IDA). A chart illustrating the benefits of
IDA accounts can be viewed and downloaded at: http://www.towergroup.com/research/content/page.jsp?pageId=802

IDAs -- similar in structure to 401(k) plans -- are designed to provide asset-building account access and matching funds that accelerate savings of low-income households toward the goal of home ownership, post-secondary education, or small business formation. According to TowerGroup, the D2D Fund has opened a doorway for financial institutions to find new sources of revenue -- providing the low-income market with offerings that are financially beneficial to customers as well as profitable for the institution.

The new TowerGroup report titled, "D2D Fund: Bringing Dreams to Reality in the Low-Income Marketplace" by Matt Schott, senior analyst in the Brokerage & Wealth Management research practice at TowerGroup, examines the challenge of bringing financial services to low-income households and investigates the promising asset-building opportunity provided by IDAs. The research also offers an in-depth case study of D2D Fund's efforts, in conjunction with SunGard, to create a Web-based record-keeping system for IDAs that will deliver operational efficiencies and extend the reach of IDAs to potentially millions of participants.

This report is available to qualified members of the press for review. To request a copy or to arrange an interview with Mr. Schott, please contact Jorge Lavina at +1.212.455.8041 or [email protected].

At TowerGroup, Mr. Schott covers the technology trends and market developments for institutions serving investor households. His focus areas include: wealth management; managed money and separately managed accounts; advice generation and financial planning; customer relationship management; and client reporting. 

About TowerGroup: TowerGroup is the leading advisory research and consulting firm focused on the global financial services industry. A respected source for trusted information and advice, TowerGroup brings many of the world's leading financial institutions, technology companies, and professional services firms a deeper understanding of the business and technology issues impacting their organizations. Headquartered near Boston in Needham, Massachusetts, and with offices in North America, Europe, and the Asia-Pacific region, TowerGroup serves a global client base. Visit http://www.towergroup.com for more information.