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Personal Finance and Advice - US - June 2015

Published By :

Mintel

Published Date : Jun 2015

Category :

Banking

No. of Pages : N/A

The personal financial advice industry is changing rapidly. Robo-advisers are increasingly popular and the number of financial advisers is shrinking as more retire and fewer are hired to replace them. As a result, competition for advisory clients is increasing, and advisers have to find ways to differentiate themselves from one another and to demonstrate the value-added services they offer.
Table of Content

Overview

What you need to know
Definition

Executive Summary

The issues
Learning to live with robo-advisers
Figure 1: Attitudes about robo-advisers, by generation, March 2015
Lots of competition for customers
Figure 2: Interest in using a financial adviser, March 2015
Figure 3: Top five factors in choosing an adviser, March 2015
The opportunities
Millennials and advice
Figure 4: Millennials’ use of financial adviser, March 2015
Parents are in need of advice …
Figure 5: Top financial priorities, by parental status, March 2015
And singles are interested as well
Figure 6: Interest in using a financial adviser, by marital status, March 2015
Impact of upcoming wealth transfer
Figure 7: Attitudes toward financial advice and advisers, by generation, March 2015
What it means

The Market – What You Need to Know

JPMorgan Chase and LPL Financial lead
The economy continues to improve
Retirement is the most important savings goal

Market Breakdown

Largest financial services companies
Figure 8: Largest financial services companies, by assets, as of March 31, 2015
Largest broker-dealers
Figure 9: Largest broker-dealers, by revenue, as of firm’s year end, 2014
Figure 10: Largest broker-dealers, by assets, number of representatives, and assets per representative, as of firm’s year end 2014

Market Factors

Unemployment is down
Figure 11: US unemployment, January 2012-March 2015
Consumer saving is up
Figure 12: US personal saving rate, March 2001-March 2015
Increased awareness of need for retirement planning
Figure 13: Personal savings priorities, by generation, June 2015

Key Players – What You Need to Know

Advice is becoming more needs-driven
The industry is aging
Robo-advice is increasing in popularity
New regulations possible

What’s Working?

Advisers are looking to add the human touch
Reaching out to Millennials
Figure 14: Use of financial adviser, by generation, March 2015
Figure 15: Vanguard personal financial advice email, 2015
Figure 16: USAA personal financial advice email, 2014

What’s Struggling?

The aging of the industry
Figure 17: Factors in choice of adviser, by age, March 2015

What’s Next?

Robo-advice is a challenge
Figure 18: Attitude toward robo-advice, by generation, March 2015
Wealthfront
Betterment
Figure 19: Betterment mobile (2014), online (2015) and print (2014) ads
LearnVest
Charles Schwab – Intelligent Portfolios
Fidelity
Potential new regulations

The Consumer – What You Need to Know

Most don’t want a financial adviser
Most think their accounts are too small
Establishing trust with clients is a must for advisers
Robo-advisers are disrupting the industry

How Consumers Are Invested

Most investments are passive
Figure 20: Most popular investments, March 2015
Men more likely to have investments
Figure 21: Type of investments held, by gender and age, March 2015
Breakdown of investable assets
Figure 22: Amount of investable assets, March 2015
Women have less invested
Figure 23: Amount of investable assets, March 2015

Use of Adviser

Most are not interested in using an adviser
Figure 24: Use of financial adviser, by interest, March 2015
Financial adviser usage increases with household income
Figure 25: Use of a financial adviser, by household income, March 2015

Factors in Choice of Adviser

Broad knowledge is a top factor in choosing an adviser
Figure 26: Important factors in choice of adviser, by gender and age, March 2015
Millennial women especially seek expertise
Figure 27: Important factors in choice of adviser, by gender and age, March 2015

Reasons for Not Using an Adviser

Most think their accounts are too small
Figure 28: Top reasons for not using an adviser, March 2015

Financial Priorities

Saving is most important
Figure 29: Financial priorities, March 2015
Higher incomes change priorities
Figure 30: Financial priorities, by household income, March 2015
Saving is for Gen X and Boomers
Figure 31: Financial priorities, by generation, March 2015
Figure 32: USAA financial readiness score direct mail ad, 2015
Figure 33: Thrivent retirement seminar direct mail ad, 2015
Figure 34: Wells Fargo financial review email, 2015

Attitudes toward Financial Advice and Advisers

Challenges for the advice industry
Figure 35: USAA financial guidance direct mail ad, 2015
Figure 36: Attitudes toward financial advice and advisers, March 2015
Millennial women are harder to engage, but offer great potential
Figure 37: Attitudes about financial advice and advisers, by gender and age, March 2015
Figure 38: PNC Bank retirement readiness direct mail ad, 2015
Consumers express a sense of distrust
Robo-advisers just as good as humans?
Figure 39: Attitudes toward financial advice and advisers, by generation, March 2015
Young people need to be shown options
Figure 40: Attitudes about financial advice and advisers, by generation, March 2015

Steps Taken toward Financial Planning

The recession spurred interest
Figure 41: Steps taken toward financial planning, by gender, age, and household income, March 2015
Gender differences disappear with age
Figure 42: Steps taken toward financial planning, by gender and age, March 2025
Figure 43: Wells Fargo budgeting webinar ad, 2015
Figure 44: USAA retirement plan email, 2014

Advice and Retirement

The perfect retirement
Retirement saving is a concern
Figure 45: Personal financial priorities, by generation and marital status, March 2015
Opportunity among Hispanics may increase
Figure 46: Personal financial priorities, by Hispanic origin, March 2015
Consumers don’t look to advisers for retirement planning
Figure 47: Attitudes toward advice and retirement, March 2015
Women and Gen X are least confident about retirement
Figure 48: Attitudes toward advice and retirement, by gender and generation, March 2015
Retirement advice and preparation are needed
Figure 49: Steps taken toward financial planning, by generation, March 2015
People with more investments are more prepared
Figure 50: Steps taken toward financial planning, by number of investments or investment accounts, March 2015

Number of Investment Accounts

How many accounts do people have?
Figure 51: Number of investments or investment accounts, March 2015
One quarter of Millennials have no investments or investment accounts
Figure 52: Number of investments or investment accounts, by generation, March 2015
How many accounts before an adviser is used?
Figure 53: Use of adviser, by number of investments or investment accounts, March 2015

Number of Financial Priorities

Millennials: How many financial priorities do they have?
Figure 54: Number of financial priorities, by generation, March 2015
Types of investments consumers hold
Figure 55: Type of investments owned, by number of financial priorities, March 2015
Use of financial adviser
Figure 56: Use of financial adviser, by number of financial priorities, March 2015
Consumers with several financial priorities are more likely to have a financial plan
Figure 57: Financial planning behavior, by number of financial priorities, March 2015

Appendix – Data Sources and Abbreviations

Data sources
Consumer survey data
Consumer qualitative research
Abbreviations and terms
Abbreviations
Terms

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