Affluent Market Tracking Study #21, Spring 2012 Survey of the Wealthiest 10% of US Households

Additional Information

Top 4 Ways to Use and Benefit from This Research

If your perceptions of today's luxury and affluent consumers (who are often very different) are largely derived from what you read in the media and online, you are probably creating your marketing strategies and plans based on false premises. To stay ahead of your competitors, you need AARC's new research report to understand today's luxury and affluent consumers and how to market to them.

1) Develop an understanding of the general mood of the affluent and their expectations for business conditions and personal income over the next 12 months. Gives you a basic perspective on general market conditions that will determine marketing opportunities and challenges

2) Identify changes in the spending plans of the affluent for your specific product category during the next 12 months. Shows you how potential sales of your product category compare to prior years and indicates what competitive pressures may result in your industry

3) Learn which segments of the affluent market represent the best sales potential for you during the next 12 months. Identifies the market segments that are cutting back on spending and those that are continuing to spend for your product category.

4) Create your marketing and sales plans with data based on the future intentions of the affluent. Unlike many other surveys of the affluent, this is not an extrapolation of past actions that they have been asked to remember and reconstruct. And it is based on a mail survey and not an online panel.

Survey and Report Content

This is the 21st in a continuing series of twice-yearly surveys that focus on the 11.4 million households that represent the wealthiest 10% of all U.S. households, as determined by The Federal Reserve Board, based on net worth. These surveys regularly measure and track their 12-month outlook for the economy, the stock market and their personal earnings, savings, investment objectives, and spending plans for 17 product categories and 8 major expenditures. In addition, each survey contains special questions exploring new topics.

Special questions in this survey reveal which segments of the affluent will be making a general effort to reduce or defer expenditures during the next 12 months and which will not, which factors will most influence a return to pre-recession levels of spending, the expected change in net worth over the next 12 months, assessment of current financial security versus 2007, and expectations of the length of time before unemployment and the stock market recover to pre-recession levels. These are all important factors that influence the mood and spending plans of the affluent. They help explain current and near term spending of the affluent and provide a perspective of what to expect over the next year or so.

This survey also contained a series of questions to identify use of and satisfaction with financial advisors and planners; the brand of the highest quality product or service; the best retail chain; the brand perception (highest quality, best value, and most prestige) of automobiles, watches, lady’s designer/couture apparel, and man’s designer suits/clothing; subscriptions to daily deal promotions; participation in each of 14 different types of customer loyalty programs; identification of the most important features of a loyalty program and the provider of the best program.

Research Methodology

Unlike other affluent and luxury market research that is based on online surveys of panels of people who are compensated for participating in regular and frequent surveys, our unique direct mail surveys are based on samples drawn at random to be representative of the precisely defined population of affluent households, consistent with the research of the Federal Reserve Board. Confident of their anonymity, the respondents to our surveys are typically more affluent and more open in providing confidential information.

Surveys were mailed to a randomly selected, national sample of 4,500 men and women in households that, based on their income and ownership of certain assets, were expected to meet the minimum net worth requirement of $800,000. The overall survey response rate was 10.1 percent, thus showing the importance of this survey to the respondents, who have been a leading indicator of economic conditions, as when they called the recession in our March 2008 survey (well ahead of everyone else).

This report is based on the responses from 372 men and women who promptly responded and met the minimum net worth requirement of $800,000. Their households have an average annual income of $267,000, an average net worth of $3.1 million, average investable assets of $1.8 million, and an average primary residence value of $1.2 million.

The survey respondents represent 27 states and the District of Columbia. Eighty-six (86) percent are married. The average age is 59. Sixty-one (61) percent are males and thirty-nine (39) percent are females.

The maximum margin of error of this survey, at 95% confidence, is five percentage points.

Additional Information

The research available from The Federal Reserve Board provides the following profile of the wealthiest 10% of U.S. households:

• Have a minimum net worth of $828,000.
• Have an average net worth of $3.1 million.
• Have an average income of $256,000.
• Earn 36% of the total income of all Americans.
• Own 63% of the personal assets of all U.S. households.
• Hold 89% of the total value of all publicly traded stock and stock mutual funds in the U.S.
• Own a primary residence valued at an average of $651,000.