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Mass Affluent and Financial Services - US - December 2012

Published By :

Mintel

Published Date : Dec 2012

Category :

Banking

No. of Pages : 171 Pages


After being challenged by the recession, the mass affluent market is staging somewhat of a comeback and has become an increasingly attractive market for banks and other types of financial institutions. The question is whether these institutions can find the hooks most relevant to this group and grow their business in this newly—and now highly—sought-after segment.”
Table of Content

SCOPE AND THEMES
What you need to know
Data sources
Consumer survey data
Comperemedia
Abbreviations and terms
Abbreviations
Terms
Companies mentioned in this report

EXECUTIVE SUMMARY
The market
The consumer
Banks have an opportunity—and a challenge
Figure 1: Satisfaction with primary bank and bank advice, by income, August 2012
Figure 2: Satisfaction with primary bank and bank advice, by net worth (less equity in primary residence),
August 2012
Opportunities in mobile banking
Figure 3: Tablet and smartphone ownership, mass affluents by household income, August 2012
Figure 4: Household use of banking and financial services technology, mass affluents, August 2012
Mass affluent attitudes about their household financial situation
Figure 5: Mass affluent attitudes toward household finances, August 2012
Mass affluents embracing the “New Frugality”
Figure 6: Mass affluent attitudes toward household financial situation, August 2012
Educational debt is holding back some younger mass affluents
Figure 7: Attitudes toward educational expenses, by age, August 2012
Retirement savings
Figure 8: Total amount in mass affluent household retirement savings, by age, August 2012
Attitudes about banks and insurance agents
Figure 9: Attitudes toward banks and insurance agents, August 2012
Mass affluent are extremely fee sensitive
Figure 10: Top three factors that influence mass affluents’ choice of financial institutions, August 2012
Primary influences in opening an account
Figure 11: Factors influencing choice of financial institution, any agree, by gender and age, August 2012
Online brokers are competing for mass affluents
Figure 12: All respondents that have at least $5,000 in self-directed account, by income, May 2012
Advice may help with asset allocation needs
Figure 13: Repertoire analysis of primary type of investments in all household savings/investment account(s),
by household net worth (less equity in primary residence), August 2012
What we think

ISSUES IN THE MARKET
How has the recession affected the mass affluent?
Where is the biggest opportunity to expand into the mass affluent market?
What do mass affluents want in their financial institution?
How can the industry reach the mass affluent?

INSIGHTS AND OPPORTUNITIES
Key points
Banks have a huge opportunity
Figure 14: Preference for advice from a bank adviser, by income, August 2012
Figure 15: Satisfaction with primary bank and bank advice, by household income, August 2012
Mobile activities
Figure 16: Tablet and smartphone ownership, by household income, August 2012
Figure 17: Ownership of smartphones and tablets, by income, household net worth (less equity in primary
residence) and household retirement savings, August 2012
Figure 18 : Household use of technology for financial activities, by age, August 2012
Retirement is a worry
Figure 19: Financial concerns of mass affluents, November 2011-October 2012
Figure 20: Total amount in household retirement savings, by age, August 2012
Mass affluents want low fees and convenience
Figure 21: Top three most important factors in choice of financial institution, by household income, August 2012 . 38
Figure 22: Factors influencing choice of financial institution, any agree, by gender and age, August 2012
College savings plans
Figure 23: Attitudes toward educational expenses, any agree, by household income, August 2012

TREND APPLICATIONS
Trend: Make it Mine
Industry application
Trend: A Simple Balance for Health
Industry application
2015 Trend—Access Anything, Anywhere
Industry implications

MARKET SIZE
Key points
Who are the mass affluent?
How many mass affluents are there?
Household income trends
Figure 24: Distribution of households, by household income, 2001-11
Figure 25: Family net worth, selected years, 2001-10
Figure 26: Household net worth (less equity in primary residence), by age, August 2012
Figure 27: Household net worth (less equity in primary residence), by gender, August 2012
Figure 28: Household net worth (less equity in primary residence), by household income, August 2012
Where are the mass affluent?
Figure 29: Top 10 U.S. mass affluent markets, October 2012

COMPETITIVE CONTEXT
Key points
Banks are focusing on mass affluent
Figure 30: Level or trust in sources of financial advice, August 2011
Figure 31: Mass affluent attitudes toward banks and advice, by household income, any agree, August 2012
Figure 32: Mass affluent attitudes toward banks and advice, by net worth (less equity in primary residence),
August 2012
Figure 33: Mass affluent attitudes towards banks and advice, by total amount in household retirement savings,
August 2012
Banks, investment services, and trust
Figure 34: Attitudes toward banks and household finances, by household retirement savings, household net
worth (less equity in primary residence) and income, August 2012
Online brokers aiming for mass affluent
Figure 35: Percentage with at least $5,000 in self-directed account, all respondents by income, May 2012
Figure 36: Confidence in making financial decisions, by household retirements savings, August 2012
Figure 37: Usage of online investment tools, by household net worth (less equity in primary residence), August
2012
Retirement stores are coming to malls

MARKET DRIVERS
Key points
The economy
Figure 38: U.S. unemployment rate, November 2011-October 2012
Figure 39: S&P/Case-Shiller Home Price Index, seasonally adjusted, Q1 2006-Q1 2012
Figure 40: S&P 500 index, Nov. 7, 2011-Oct. 7, 2012
Figure 41: Dow Jones Industrial Average index, November 2011-October 2012
Optimism is in the air
Figure 42: Mass affluents’ outlook on the economy for the next three months, June 2010-February 2012
Figure 43: Financial concerns of mass affluents, November 2011-October 2012
Figure 44: General purchase intentions of mass affluents, November 2011, August 2012

MARKETING CHANNELS
Key points
Bank branches are important
Figure 45: Importance of branch location in choosing a financial institution, by income, August 2012
Social media
Figure 46: Monthly social media usage, all respondents by income, August 2012
Figure 47: Mass affluent attitudes toward social media and financial institutions, by gender, August 2012
Figure 48: Top 10 most popular banks on Facebook, September 2011
Figure 49: Preferred types of information on social platforms, May 2012
Print is still important

LEADING COMPANIES
Key points
Bank of America Merrill Lynch
JPMorgan Chase

INNOVATIONS AND INNOVATORS
Key points
SunTrust
Merrill Edge
Acru Bank
Figure 50: Acru bank branch, 2012

MARKETING STRATEGIES
Key points
Rewards programs, not incentives
Figure 51: Factors influencing choice of particular financial institution, by gender and age, August 2012
Appealing to do-it-yourselfers
Figure 52: TD Ameritrade direct mail advertisement, April 2012
Figure 53: Fidelity online advertisement, August 2012
Micro-segmentation is key
Figure 54: Fidelity print advertisement, December 2011
Premium rewards cards remain popular products
Figure 55: Chase sapphire preferred online advertisement, June 2012, October 2012
Figure 56: Citibank print advertisement, August 2012
General advertising
Figure 57: Chartis print advertisement, August 2012
Figure 58: UBS print advertisement, January 2012
Figure 59: BlackRock iShares print advertisement, October 2011
Figure 60: Wells Fargo online advertisement, December 2011
Figure 61: Fidelity online advertisement, January 2012
Figure 62: Merrill Edge direct mail advertisement, September 2012
Figure 63: Merrill Lynch direct mail advertisement, September 2012
Additional television ads
Figure 64: Charles Schwab television advertisement, 2012
Figure 65: Citibank television advertisement, 2012

THE MASS AFFLUENT CONSUMER—HOUSEHOLD NET WORTH
Key points
Household net worth (less equity in primary residence)
Figure 66: Household net worth (less equity in primary residence), mass affluents by gender, August 2012
Figure 67: Household net worth (less equity in primary residence), mass affluents by age, August 2012
Figure 68: Household net worth (less equity in primary residence), mass affluents by household income,
August 2012
Figure 69: Household net worth (less equity in primary residence), mass affluents by education, August 2012

ATTITUDES TOWARD BANKS
Key points
Bank satisfaction
Figure 70: Attitudes toward banks and household finances, by age, August 2012
Figure 71: Attitudes toward banks and household finances, by household income, August 2012
Figure 72: Attitudes toward banks and household finances, by region, August 2012
Figure 73: Attitudes toward banks and household finances, by amount in household retirement savings,
August 2012

USE OF TECHNOLOGY
Key points
Men use technology more
Figure 74: Household use of banking and financial services technology, by gender, August 2012
Figure 75: Household use of banking and financial services technology, by gender and age, August 2012
Figure 76: Household use of banking and financial services technology, by household income, August 2012
Figure 77: Household use of banking and financial services technology, by household size, August 2012
Figure 78: Household use of banking and financial services technology, by household net worth (less equity in
primary residence), August 2012
Figure 79: Household use of banking and financial services technology, by total amount in household
retirement savings account(s), August 2012

HOUSEHOLD SPENDING, INVESTING, AND FINANCIAL DECISIONS
Key points
The recession has affected financial behavior
Figure 80: Attitudes toward household finances, by gender, August 2012
Figure 81: Attitudes toward household finances, by age, August 2012
Figure 82: Attitudes toward household finances, by amount in household retirement savings account(s),
August 2012
Figure 83: Attitudes toward household finances, by household income, August 2012
Figure 84: Attitudes toward household finances, by region, August 2012

CHOOSING A FINANCIAL INSTITUTION
Key points
Low fees are most important
Figure 85: Factors influencing choice of financial institution, by household income, August 2012
Figure 86: Factors influencing choice of financial institution, by region, August 2012
Figure 87: Factors influencing choice of financial institution, by household net worth (less equity in primary
residence), August 2012
Figure 88: Factors influencing choice of financial institution, by race/Hispanic origin, August 2012
Figure 89: Factors influencing choice of financial institution, by area, August 2012

TYPE OF RETIREMENT ACCOUNT OWNED
Key points
More than half have 401(k) plans
Figure 90: Type of retirement savings accounts owned by household, mass affluent by age, August 2012
Figure 91: Type of retirement savings accounts owned, overall by age, June/July 2011
Figure 92: Type of retirement savings accounts owned by household, by household income, August 2012
Figure 93: Type of retirement savings account owned by household, by household retirement savings
account(s), August 2012
Figure 94: Type of retirement savings account owned by household, by race/Hispanic origin, August 2012
Figure 95: Type of retirement savings account owned by household, by household net worth (less equity in
primary residence), August 2012

INVESTMENTS IN SAVINGS/INVESTMENT ACCOUNTS
Key points
Mutual funds, cash, and money market funds are primary investments
Figure 96: Primary type of investments in all household savings/investment account(s), by gender and age
August 2012
Figure 97: Primary type of investments in all household savings/investment account(s), by household income,
August 2012
Figure 98: Primary type of investments in all household savings/investment account(s), by education,
August 2012
Figure 99: Primary type of investments in all household savings/investment account(s), by amount in
household retirement savings account(s), August 2012

TOTAL AMOUNT IN RETIREMENT SAVINGS
Key points
Almost half of respondents have more than $200K
Figure 100: Total amount in household retirement savings account(s), by gender, August 2012
Figure 101: Total amount in household retirement savings account(s), by age, August 2012
Figure 102: Total amount in household retirement savings account(s), by marital status, August 2012
Figure 103: Total amount in household retirement savings account(s), by household size, August 2012

REPERTOIRE ANALYSIS
Key points
Younger mass affluents have fewer types of investments
Figure 104: Repertoire of primary type of investments in all household savings/investment account(s), by
gender and age, August 2012
Figure 105: Repertoire of primary type of investments in all household savings/investment account(s), by
household net worth (less equity in primary residence), August 2012
Figure 106: Attitudes towards banks and household finances, by repertoire of primary type of investments in
all household savings/investment account(s), August 2012
Figure 107: Household financial behavior, by repertoire of primary type of investments in all household
savings/investment account(s), August 2012

CLUSTER ANALYSIS
Satisfied Savers
Demographics
Characteristics
Opportunity
Financially Unprepareds
Demographics
Characteristics
Opportunity
Technologically Disconnecteds
Demographics
Characteristics
Opportunity
Complacent Loyalists
Demographics
Characteristics
Opportunity
Cluster Characteristic Tables
Figure 108: Target clusters, August 2012
Figure 109: Household net worth (less equity in primary residence), by target clusters, August 2012
Figure 110: Attitudes towards banks and household finances, by target clusters, August 2012
Figure 111: Mass affluent attitudes towards finances, banks and advisers, by target clusters, August 2012
Figure 112: Household use of technology and banking, by target clusters, August 2012
Figure 113: Factors influencing choice of financial institution, by target clusters, August 2012
Figure 114: Type of retirement savings account owned by household, by target clusters, August 2012
Figure 115: Total amount in household retirement savings account(s), by target clusters, August 2012
Figure 116: Primary type of investments in all household savings/investment account(s), by target clusters,
August 2012
Figure 117: Repertoire of primary type of investments in all household savings/investment account(s), by
target clusters, August 2012
Cluster demographic tables
Figure 118: Target cluster, by demographic, August 2012
Cluster methodology

APPENDIX—TRADE ASSOCIATIONS

APPENDIX: RESEARCH METHODOLOGY

CONSUMER RESEARCH
Primary Data Analysis
Sampling
Global Market Insite (GMI)
Secondary Data Analysis
Experian Simmons National Consumer Studies
Statistical Forecasting
Statistical modelling
Qualitative insight
The Mintel fan chart
Weather analogy

APPENDIX: WHAT IS MINTEL?
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