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Financial Needs of Affluent and High Net Worth Consumers - US - November 2016

Published By :

Mintel

Published Date : Nov 2016

Category :

Banking

No. of Pages : N/A

Most affluent and HNWI (high net worth individuals) have sophisticated financial needs and concerns, but only approximately half use a financial adviser and only one third have a written financial plan. Advisory services might make it easier for them to reach their goals, but trust in professionals is relatively low among this group, and many wealthy people prefer to manage their finances themselves. Robo-advice is another option and young affluents and HNWIs are beginning to utilize this. How can the financial services industry integrate the benefits of technology with those of a human adviser?

Table of Contents

OVERVIEW
What you need to know
Definition

EXECUTIVE SUMMARY
The issues
One third aren’t sure they have enough for retirement
Figure 1: Confidence in having enough for retirement, by household income, August 2016
Most don’t have a written plan
Figure 2: Has a written financial plan, by household net worth, August 2016
Advisers are not necessarily trusted
Figure 3: Attitude toward advice and advisers, by gender and age, August 2016
Robo-advisers don’t impress HNWI
Figure 4: Attitudes toward advice and financial services, by household net worth, August 2016
The opportunities
Focus on mortgage lending
Figure 5: Financial priorities – Buying a home, by generation, August 2016
Robo-advisers should target Millennials
Figure 6: Use robo-adviser, by generation, August 2016
Parents of young children may need help achieving short-term goals
Figure 7: Financial goals, by parental status, August 2016
Retirement planning for the highest-earning affluents
Figure 8: Attitudes toward advice and advisers, by household income, August 2016
What it means

THE MARKET – WHAT YOU NEED TO KNOW
An increase in the number of households with $500K+ in income-producing assets
Projected affluent market to increase
Median and mean incomes are trending up
More people earn high incomes

MARKET SIZE AND FORECAST
An increase in the number of households with $500K+ in income-producing assets
Figure 9: Number of households with $500K+ in income-producing assets, 2011-16 (forecast)
Historic and projected affluent market
Figure 10: Fan chart forecast number of US households with income-producing assets of $1 million+, 2011-21

MARKET FACTORS
Median income is trending up
Figure 11: Median US income, Jan. 1, 2010-Jan. 1, 2015
More people earn high incomes
Figure 12: Individuals aged 15+ with annual income of $150K+, 2006-15

KEY PLAYERS – WHAT YOU NEED TO KNOW
More self service
Goals-based planning
Expanding wealth management channel capabilities

WHAT’S IN?
More self-service
Figure 13: Use of financial advice, by generation, August 2016
Goals-based planning
Figure 14: Attitudes toward advice and financial services, by household investable assets and household net worth, August 2016
Figure 15: Bank of America/Merrill Lynch Email ad, 2016

WHAT’S STRUGGLING?
Gender wage gap continues
Figure 16: Internet users aged 18+ with $500K+ in investable assets, by demographics, August 2016
Wealthy have goals, but no plans
Figure 17: Attitudes toward advice and financial services, by household net worth, August 2016

WHAT’S NEXT?
Expanding wealth management channel capabilities
Figure 18: Use of financial technology, by generation, August 2016

THE CONSUMER – WHAT YOU NEED TO KNOW
What the wealthiest have already achieved
Short-term goals may be better achieved with help
Young women plan to earn more and invest more
Accessibility through all channels is key
Financial advisers are most trusted – but still have work to do
Trust in adviser depends on age, not income
Only half of affluents use a human financial adviser
Better online banking drives more switching than better mobile banking
Fees force switching the most
Saving money is important to affluents and HNWIs
Almost half of affluent and HNW do their own research

FINANCIAL PRIORITIES
What the wealthiest have already achieved
Figure 19: Financial priorities, by household net worth, August 2016
Short term
Short-term goals may be better achieved with help
Figure 20: Financial priorities, August 2016
Affluent parents are looking toward the future
Figure 21: Financial priorities, by parental status, August 2016
Young people plan to buy life insurance soon
Figure 22: Financial priorities, by generation, August 2016
Figure 23: AIG life insurance email, 2016
Net worth doesn’t affect three of most important short-term goals
Figure 24: Financial priorities, by household net worth, August 2016
Medium term
Young women plan to earn more and invest more
Figure 25: Financial priorities, by gender and age, August 2016
Big ticket items are planned for the medium term
Figure 26: Financial priorities, by household income, August 2016
Long term
Gen X wants to pay off their mortgage
Figure 27: Financial priorities, by generation, August 2016
Lowest earning affluents plan long-term college saving
Figure 28: Financial priorities, by household income, August 2016

FACTORS INFLUENCING CHOICE OF PROVIDER
Accessibility through all channels is key
Figure 29: Factors influencing choice of bank, by generation, August 2016
Rates are important to parents
Figure 30: Factors influencing choice of bank, by parental status, August 2016
Young males want a financial adviser
Figure 31: Factors influencing choice of bank, by gender and age, August 2016
Convenience and low fees are most important to the wealthiest
Figure 32: Factors influencing choice of bank, by household investable assets and household net worth, August 2016

SOURCE OF FINANCIAL INFORMATION
Financial advisers are most trusted – but still have work to do
Figure 33: Trusted source of financial information, by household net worth, August 2016
Financial advisers far more trusted among older affluents
Figure 34: Trusted source of financial information, by gender and age, August 2016
Trust in adviser depends on age, not income
Figure 35: Trusted source of financial information, by age and household income, August 2016

USE OF FINANCIAL ADVICE
Use of human advisers
Only half of affluents use a human financial adviser
Figure 36: Use of financial advice, August 2016
Older affluent women most likely to use a human adviser
Figure 37: Use of financial advice, by gender and age, August 2016
Use of robo-advisers
Robo-advisers appeal to younger male affluents
Figure 38: Use of financial advice, by gender and age, August 2016
Robo-advisers most popular among high net worth
Figure 39: Use of financial advice, by household net worth, August 2016
Use of both human and robo-advisers
Many affluent use both robo- and human advisers
Figure 40: Use of financial advice, by use of financial advice, August 2016
Millennials are most likely to use both human and robo-advisers
Figure 41: Use of financial advice, by generation, August 2016

USE OF FINANCIAL TECHNOLOGY
Better online banking drives more switching than better mobile banking
Figure 42: Use of financial technology, by generation, August 2016
Fees force switching the most
Figure 43: Use of financial technology, by household income, August 2016
FinTech is more useful to parents than non-parents
Figure 44: Use of financial technology, by parental status, August 2016
Young male affluents are more likely to use mobile
Figure 45: Use of financial technology, by gender and age, August 2016
Among most affluent, online is more important than mobile
Figure 46: Use of financial technology, by household investable assets, August 2016

ATTITUDES TOWARD ADVICE AND FINANCIAL SERVICES
Saving money is important to affluents and HNWIs
Figure 47: Attitudes toward advice and financial services, by household net worth, August 2016
Advisers not always trusted
Figure 48: Attitude toward advice and financial services, by household income, August 2016
Young affluent males most likely to measure success by money
Figure 49: Attitude toward advice and financial services, by gender and age, August 2016
Figure 50: Fidelity 401(k) email ad, 2016
Affluent are not confident about their financial future
Figure 51: Attitude toward advice and financial services, by generation, August 2016
Almost half of affluent and HNW do their own research
Figure 52: Attitude toward advice and financial services, by household net worth, August 2016

APPENDIX – CHAID ANALYSIS
Methodology
Gen X and Baby Boomers trust their advisers
Figure 53: Most trusted source of financial information – CHAID – Tree output, August 2016
Figure 54: Source of financial information – CHAID – Table output, August 2016

APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Fan chart forecast
Consumer survey data
Direct marketing creative
Abbreviations and terms
Abbreviations
Terms

List of Table

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