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Lifestage Marketing in Financial Services - US - January 2016

Published By :

Mintel

Published Date : Jan 2016

Category :

Advertising and Marketing

No. of Pages : N/A

There are many ways to define a lifestage, including by age, marital status, or parental status. The financial needs of each lifestage are unique and financial institutions are always seeking ways to appeal to the needs of each one. While the recent recession affected everybody, it may have permanently altered the way Millennials, in particular, look at the financial world. This report examines the differences in the financial goals of each lifestage, how each gets information about financial services topics, what they are looking for from financial institutions, and how they make their decisions on which institutions to use

Overview

What you need to know
Definition

Executive Summary

The issues
America is aging
Figure 1: Growth in US population, by age, 2015 versus 2025
Different generations use different media channels
Figure 2: Sources of financial information, by generation, October 2015
The opportunities
Focus on retirement planning and income distribution
Figure 3: Amount in retirement account(s), by generation, May 2015
Millennials want to save for children’s education
Figure 4: Millennials interested in education savings account, by type of goal, October 2015
Few believe they have enough life insurance
Figure 5: Life insurance ownership, by generation, October 2015
Figure 6: Buying life insurance as a goal, by generation, October 2015
What it means

The Market – What You Need to Know

An aging population
More older people will continue working
Most – but not all – are doing better financially
Unemployment continues to improve
Debt is still a challenge

Market Breakdown

An aging America
Figure 7: US population by age, 2015, 2020, 2525
Labor force participation
Figure 8: Labor force participation by age, 1992, 2002, 2012, 2022 (projected)

Market Factors

Most – but not all – are doing better financially
Figure 9: Average income and average expenditures, by age, 2014
Unemployment headed down for all generations
Figure 10: US unemployment rate October 2014-October 2015
Debt is still an issue
Figure 11: Total debt distribution, Q2 2013-Q2 2015

Key Players – What You Need to Know

Tech tools are popular among all generations
Expanded use of video
Gen X – the “lost” generation

What’s Working?

Tech tools are useful to all generations
Figure 12: Vanguard Personal Advisor Services online ad, 2015
Expanded use of video
Figure 13: Interested in financial education videos, by generation, November 2014

What’s Struggling?

Gen X – the “lost” generation
Figure 14: Switched primary checking account provider, by generation, November 2014
Figure 15: US population distribution, by generation, 2015, 2020

The Consumer – What You Need to Know

Different priorities for different lifestages
Young people get information from a wider variety of media
Incentives may help increase mobile payment system usage
Young people are looking for advice alternatives
Location is still the most important feature in a bank

Key Financial Goals

Short-term goals: paying debt and saving
Figure 16: Most popular short-term goals, October 2015
Eliminating debt versus saving for retirement
Figure 17: Short-term goals, by generation, October 2015
Being a parent changes financial priorities
Figure 18: Short-term goals, by gender and parental status, October 2015
Advice and short-term goals
Figure 19: Interest in adviser for short-term goals, October 2015
Medium-term goals: save money for the longer term
Figure 20: Medium-term goals, October 2015
Older Millennials are increasingly focused on their finances
Figure 21: Medium-term goals, by generation, October 2015
Income impacts engagement with finances
Figure 22: Medium-term goals, by age and household income, October 2015
Advice is needed for medium-term goals
Figure 23: Interest in adviser for medium-term goals, October 2015
Long-term goals: dominated by retirement
Figure 24: Long-term goals, October 2015
iGens are planning for the long term
Figure 25: Long-term goals, by generation, October 2015
Singles are looking forward
Figure 26: Long-term goals, by marital status, October 2015
Few want advisers to help with long-term goals
Figure 27: Interest in adviser for long-term goals, October 2015
Consumers’ goals in their own words
Millennials
Older Millennials/Younger Gen Xers
Older Gen Xers/Early Baby Boomers
Late Baby Boomers/WWII/Swing Generations

Source of Financial Information

Young people get information from a wider variety of media
Figure 28: Top five sources of financial information, by generation, October 2014
Figure 29: Navy Federal Credit Union online ad, 2015, Capital One 360 email, 2015
Millennial men are easier to reach than are Millennial women
Figure 30: Sources of financial information, by gender and generation, October 2015
Hispanics are easier to reach
Figure 31: Sources of financial information, by Hispanic origin, October 2015
Use television to reach Blacks
Figure 32: Sources of financial information, by race, October 2015

Responses to Financial Services Ads

Television is still relevant
Millennials
Older Millennials/Younger Gen Xers
Older Gen Xers/Early Baby Boomers
Late Baby Boomers/WWII/Swing Generations
Ads need to focus on benefits and build trust
Millennials
Older Gen Xers/Early Baby Boomers
Late Baby Boomers/WWI/Swing Generations
Millennials are most responsive to advertising
Figure 33: Responses to financial services ad, by generation, October 2015
Men are more likely to respond to financial ads
Figure 34: Responses to financial services ad, by generation, October 2015

What Consumers Want from Financial Institutions

Financial understanding increases with age – and so does the use of an adviser
Figure 35: Betterment online ad, 2015
There is opportunity for advisers at all lifestages
Figure 36: Understanding of financial topics, by generation, October 2015
Women are far less confident than men
Figure 37: Understanding of financial topics, by gender and age, October 2015
Bundling may attract Millennials
Figure 38: Choosing a financial institution, by gender and age, October 2015
Hispanics more likely to choose institution carefully
Figure 39: Choosing a financial institution, by Hispanic origin, October 2015
Figure 40: BankAmeriDeal email ad, 2015
Figure 41: BofA Preferred Rewards direct mail ad, 2015
Asians and Hispanics need life insurance
Figure 42: Have enough life insurance to protect family, by race and Hispanic origin, October 2014

The Attraction of Technology

Millennials are most interested in internet-only banks
Figure 43: Current use and future use of internet-only bank, by generation, October 2014
Figure 44: Ally Bank print ad, 2015
Parents – especially dads – like internet-only banks
Figure 45: Current use and future use of internet-only bank, by parental status and presence of children, October 2015
Figure 46: Ally Bank banner ad, 2015
Incentives will help drive mobile payment systems usage
Figure 47: Current and future use of mobile payment systems, by generation, October 2015
Income matters, too
Figure 48: Current and future use of internet-only bank, by age and household income, October 2015
Mobile payment growth may be challenged
Figure 49: Current and future use of mobile payment system, by age and household income, October 2015
Parents are a prime market
Figure 50: Current and future use of mobile payment system, by age and household income, October 2015
How technology has changed banking
Millennials
Older Millennials/Younger Gen Xers
Older Gen Xers/Early Baby Boomers
Late Baby Boomers/WWI/Swing Generations

Plans for Handling Finances

The need for advice is clear
Figure 51: Financial planning activities, by generation, August 2015
Parents are looking for advice
Figure 52: Interest in financial adviser, by parental status, October 2015
Young people are looking for alternatives to traditional financial services
Advice
Figure 53: Interest in financial advice, by generation, October 2015
Banks
Figure 54: Interest in alternative banks, by generation, October 2015
Advice people already use
Millennials
Late Baby Boomers/WWI/Swing Generations

Important Features in a Financial Institution

Location is still the most important feature
Different generations seek out different features
Figure 55: Five most important features in a financial institution, by generation, October 2015
Priorities of different generations
Millennials
Older Millennials/Younger Gen Xers
Older Gen Xers/Early Baby Boomers
Late Baby Boomers/WWII/Swing Generations
Parents and non-parents have different priorities
Figure 56: Five most important features in a financial institution, by parental status, October 2015
Hispanics actively look for information
Figure 57: Features important in a financial institution, by Hispanic origin, October 2015

Attitudes toward Personal Finances

Financial security is of paramount importance
Figure 58: Financial priorities, by generation, October 2015
Life circumstances change priorities
Millennials
Older Millennials/Younger Gen Xers
Older Gen Xers/Early Baby Boomers
Late Baby Boomers/Swing/WWII generation
Attitudes toward financial services industry and institutions
The advice industry needs to adapt
Figure 59: Attitudes toward financial industry and institutions, by generation, October 2015
Attitudes toward financial tools
Security
Figure 60: Attitudes toward financial tools, by generation, October 2015
Attitude toward own personal financial situation
Figure 61: Optimism about own personal financial situation, by generation, October 2015
Optimism is highest among young high earners
Figure 62: Outlook on personal financial situation, by age and household income, October 2015
Hispanics and Blacks are more optimistic
Figure 63: Outlook on personal financial situation, by Hispanic origin and race, October 2015

What’s More Important: Money or Time?

Millennials
Older Millennials/Younger Gen Xers
Older Gen Xers/Early Baby Boomers
Late Baby Boomers/WWII/Swing generations

Appendix – Data Sources and Abbreviations

Data sources
Consumer survey data
Consumer qualitative research
Direct marketing creative
Abbreviations and terms
Abbreviations

Appendix – Consumer

Most important features in a financial institution
Figure 64: Five most important features in a primary financial institution, by demographics, October 2015
Have enough life insurance
Figure 65: Believe have enough life insurance, by demographics, October 2015

List of Table

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