Financial Services Marketing to ABs: Market Assessment 2002

Published by: Key Note Publications Ltd

Published: Sep. 1, 2002 - 170 Pages

Table of Contents

1. Introduction

• The Topic
  
• Objectives
  
• Methodology
  
• Original Research
  
• Problems In The Research Process
  
• Definition

2. Strategic Overview

• Cloudy Classifications
  
• Table 1: Occupational Status Of People Of Working Age In The UK By Sex (Million), 1999 And 2001
  
• Table 2: Occupational Status Of People Aged 16 And Over In Employment In The UK By Sex (Million And %), Winter 2001/2002†
  
• Financial Lifecycles
  
• More Barriers Than Opportunities
  
• The Sandler And Pickering Reports: Likely Implications

3. The Wealth Of The Nation

• Income Polarisation
  
• Squeeze In The Middle
  
• Table 3: Composition Of Household Income In The UK (% And £Bn), 1987, 1991, 1996, 1998, 1999 And 2000
  
• Figure 1: Composition Of Household Income In The UK (%), 1987, 1991, 1996, 1998, 1999 And 2000
  
• Table 4: Income Bands By Total Income Before Tax By Sex (000 And %), 2002/2003†
  
• Figure 2: Income Bands By Total Income Before Tax By Sex (000), 2002/2003†
  
• More Adults, More Cash
  
• Table 5: Profile Of Pensioner Households In Great Britain By Amount Of Savings, Compared With Households Overall (Million And %), 1999/2000†
  
• Table 6: Estimated Number Of Individuals In Each Income Quintile In Great Britain (Million), 1999/2000
  
• Breaching £1,000 A Week
  
• Table 7: Weekly Income And Source Of Income By Household Composition In The UK (% And £), 2000/2001
  
• Incomes Peak Before Age 50
  
• Table 8: Income And Source Of Income By Age Of Head Of Household In The UK (% And £), 2000/2001
  
• Table 9: Household Income By Socio-Economic Group Of Head Of Household† In The UK (Million And £), 1999/2000 And 2000/2001
  
• Figure 3: Household Income By Socio-Economic Group Of Head Of Household† In The UK (£), 1999/2000 And 2000/2001
  
• Savings And Wealth
  
• Why Save?
  
• Up And Down With Life And Pensions
  
• Table 10: Net Wealth Of The Household Sector In The UK (£Bn And %), 1987, 1991, 1996, 1998, 1999 And 2000
  
• 1% Of People Hold 25% Of Wealth
  
• Table 11: Distribution Of Marketable Wealth Including Dwellings In The UK (%), 1976, 1998, 1999 And 2002
  
• Figure 4: Distribution Of Marketable Wealth Including Dwellings In The UK (%), 1976, 1998, 1999 And 2002
  
• Table 12: Distribution Of Marketable Wealth Excluding Dwellings In The UK (%), 1976, 1998, 1999 And 2002
  
• Millionaires' Rows

4. Spending And Borrowing

• The Revolving Door
  
• Household Spending
  
• Table 13: Average Weekly Household Expenditure On Financial Services In The UK (£), 1997/1998, 1999/2000 And 2000/2001
  
• Pensions
  
• Table 14: Pension-Scheme Membership In The UK By Sex And Occupational Status (%), 1999/2000
  
• Private Medical Insurance
  
• Table 15: Subscribers To Private Medical Insurance In The UK (000), 1990-2000
  
• Banging Against The Credit Ceiling
  
• Table 16: Total Net Lending To Individuals In The UK (£M And %), 1999-2001
  
• Table 17: Amounts Outstanding: Loans To Individuals In The UK (£M), End Of May 2002
  
• Figure 5: Amounts Outstanding: Loans To Individuals In The UK (£M), End Of May 2002
  
• Table 18: Lending Secured On Dwellings: Approvals For House Purchases, Remortgages And Other Loans (£M), 2001

5. Advertising And Promotion

• Main Media Advertising
  
• By Financial-Services Groups
  
• Table 19: Main Media Advertising Expenditure By Selected Financial-Services Groups (£M), Years Ending September 1999, December 2000 And March 2002
  
• By Principal Categories
  
• Table 20: Principal Categories Of Main Media Financial-Services Advertising (£M And %), Years Ending September 1999, December 2000 And March 2002
  
• By Major Products
  
• Table 21: Main Media Advertising Expenditure On Major Financial-Services Products (£M), Years Ending September 1999, December 2000 And March 2002 54
  
• By Private Banking
  
• Table 22: Main Media Advertising Expenditure On Private Banking† (£000 And %), Year Ending March 2002
  
• Figure 6: Main Media Advertising Expenditure On Private Banking† (£000), Year Ending March 2002
  
• Equity Release
  
• Independent Advice
  
• Radio Bucks The Trend
  
• Sport And Culture Opportunities
  
• Less Direct Mail For Abs

6. The Technology Of Customer Relations

• Constructing The Non-Person
  
• Technology Barrier
  
• Channel Segmentation
  
• Sales And Marketing Tools
  
• Wooing The Alientated Customer

7. An International Perspective

• Chinese Puzzle
  
• Swiss Flavour To Private Banking
  
• German Attraction
  
• New Law On Distance Marketing
  
• EU Wants Wider Access To Hedge Funds
  
• The Disappearing Dream

8. Opportunities For And Threats To Financial Services

• Opportunities
  
• Professionals Are Quids In
  
• Table 23: Average Household Disposable Income And Spending By Occupational Group (£ Per Week), 2000/2001
  
• Figure 7: Average Household Disposable Income And Spending By Occupational Group (£ Per Week), 2000/2001
  
• Table 24: Average Household Disposable Income And Spending By Age Of Head Of Household (£ Per Week), 2000/2001
  
• Figure 8: Average Household Disposable Income And Spending By Age Of Head Of Household (£ Per Week), 2000/2001
  
• Preparing For A Longer Life
  
• Table 25: UK Population Change By Age And Sex (Million), 1901, 1931, 1961, 1991, 2000, 2011 And 2025
  
• More Households, More Services
  
• Table 26: Changing Household Composition In Great Britain (Million), 1961, 1971, 1981, 1991 And 2001
  
• Figure 9: Changing Household Composition In Great Britain (Million), 1961, 1971, 1981, 1991 And 2001
  
• Threats
  
• Poor Communications Turn Away Customers
  
• Marginalising The Middle
  
• Negative Returns And Too Much Debt

9. Consumer Dynamics

• Overview
  
• Table 27: Summary Of Responses To The Nop Survey (% Of Respondents), 2002
  
• High Levels Of Debt And No Contributions Towards A Pension
  
• "Not Counting Any Mortgage To Buy The Home I Live In, I Owe More Than I Have In Savings"
  
• "I Currently Do Not Make And No Other Party On My Behalf Makes Any Contributions Towards A Pension"
  
• Table 28: Net Debt And No Pension Contributions (% Of Respondents), 2002
  
• Contributing To A Stakeholder Pension And To Private Medical Treatment
  
• "I Contribute To A Stakeholder Pension"
  
• "I Contribute To An Insurance Policy For Private Medical Treatment"
  
• Table 29: Contributing To Stakeholder Pensions And Private Medical Treatment (% Of Respondents), 2002
  
• Ambivalence About Saving
  
• "I Go Without Luxuries Like Holidays And New Cars So That I Can Save More Money"
  
• "I Would Rather Spend Now And Not Worry About The Consequences In The Future"
  
• Table 30: Attitudes Towards Saving (% Of Respondents), 2002
  
• Saving Loses Entitlement To Benefits And Wanting To Leave Financial Assets To Relatives
  
• "Saving Is A Waste Of Time Because You Lose Entitlement To Welfare Benefits"
  
• "I Would Like To Leave Any Financial Assets I Have To My Children Or Other Relatives" Table 31: Saving Loses Entitlement To Benefits And Wanting To Leave Financial Assets To Relatives (% Of Respondents), 2002
  
• Investing In Property, And Attitudes To Directors' And Senior Managers' Bonuses
  
• "I Think That Investing In Property Is Safer Than Investing In Company Shares"
  
• "The Directors And Senior Managers Of Banks And Insurance Companies Should Not Receive Bonuses If Their Companies Make Losses"
  
• Table 32: Investing In Property And Senior Managers Of Loss-Making Companies Should Not Receive Bonuses (% Of Respondents), 2002
  
• Satisfation With Financial Advice And Standard Of Service
  
• "I Am Satisfied With The Quality Of Financial Advice That Is Available To Me"
  
• "I Am Generally Very Happy With The Standard Of Service I Receive From The Banks, Building Socieites And Insurance Companies That I Deal With"
  
• Table 33: Quality Of Financial Advice And Standards Of Service From Banks, Building Societies And Insurance Companies (% Of Respondents), 2002
  
• Dissatisfaction With Standards Of Service And Use Of The Internet
  
• "I Am Often Unhappy With The Standard Of Service I Receive From The Banks, Building Socieites And Insurance Companies That I Deal With"
  
• "I Have Used The Internet To Sign Up To One Or More Financial Products Such As A Savings Account, Personal Loan Or Insurance Policies"
  
• Table 34: Dissatisfaction With Customer Service, And Use Of The Internet For Financial Products (% Of Respondents), 2002
  
• Internet Banking And Local Branches
  
• "I Have Full Confidence In Internet Banking"
  
• "If My Bank Or Building Society Closed The Branches Nearest Me, I Would Move My Account To A Bank Or Building Society That Does Have Local Branches"
  
• Table 35: Weak Confidence In Internet Banking And Preference For Local Branches (% Of Respondents), 2002

10. Company Profiles

• Introduction
  
• Table 36: Largest Banks And Insurers In The UK Ranked By Market Capitalisation (£Bn And %), 31st December 2000 And 2001 And 9th July 2002
  
• Abbey National Group Plc
  
• Corporate Strategy
  
• Advertising And Distribution
  
• Profitability
  
• Table 37: Key Figures For Abbey National Group Plc (£M, Pence And %), Years Ending 31st December 1997-2001
  
• Future Developments
  
• Alliance & Leicester Plc
  
• Corporate Strategy
  
• Advertising And Distribution
  
• Profitability
  
• Table 38: Key Figures For Alliance & Leicester Plc (£M, Pence And %), Years Ending 31st December 1997-2001
  
• Future Developments
  
• Aviva Plc
  
• Corporate Strategy
  
• Advertising And Distribution
  
• Profitability
  
• Table 39: Key Figures For Aviva Plc (£M, Pence And %), Years Ending 31st December 1997-2001
  
• Future Developments
  
• Barclays Plc
  
• Corporate Strategy
  
• Advertising And Distribution
  
• Profitability
  
• Table 40: Key Figures For Barclays Plc (£M, Pence And %), Years Ending 31st December 1997-2001
  
• Future Developments
  
• Equitable Life
  
• Corporate Strategy
  
• Advertising And Distribution
  
• Profitability
  
• Future Developments
  
• HBOS Plc
  
• Corporate Strategy
  
• Advertising And Distribution
  
• Profitability
  
• Table 41: Key Figures For Hbos Plc (£M, Pence And %), Years Ending 31st December 1997-2001
  
• Future Developments
  
• HSBC Plc
  
• Corporate Strategy
  
• Advertising And Distribution
  
• Profitability
  
• Table 42: Key Figures For Hsbc Plc (£M, Pence And %), Years Ending 31st December 1997-2001
  
• Future Developments
  
• The Legal & General/Northern Rock Partnership
  
• Corporate Strategy
  
• Advertising And Distribution
  
• Profitability
  
• Table 43: Key Figures For Legal & General Group Plc (£M, Pence And %), Years Ending 31st December 1997-2001
  
• Table 44: Key Figures For Northern Rock Plc (£M, Pence And %), Years Ending 31st December 1997-2001
  
• Future Developments
  
• Lloyds Tsb Group Plc
  
• Corporate Strategy
  
• Advertising And Distribution
  
• Profitability
  
• Table 45: Key Figures For Lloyds TSB Group Plc (£M, Pence And %), Years Ending 31st December 1997-2001
  
• Future Developments
  
• Prudential Plc
  
• Corporate Strategy
  
• Advertising And Distribution
  
• Profitability
  
• Table 46: Key Figures For Prudential Plc (£M, Pence And %), Years Ending 31st December 1997-2001
  
• Future Developments
  
• Royal Bank Of Scotland Group Plc
  
• Corporate Strategy
  
• Advertising And Distribution
  
• Profitability
  
• Table 48: Key Figures For Royal Bank Of Scotland Group Plc (£M, Pence And %), Years Ending 31st December 1997-2001
  
• Future Developments
  
• Royal & Sun Alliance Insurance Group Plc
  
• Corporate Strategy
  
• Advertising And Distribution
  
• Profitability
  
• Table 47: Key Figures For Royal & Sun Alliance Insurance Group Plc (£M, Pence And %), Years Ending 31st December 1997-2001
  
• Future Developments
  
• Standard Life
  
• Corporate Strategy
  
• Advertising And Distribution
  
• Profitability
  
• Future Developments
  
• Zurich Financial Services
  
• Corporate Strategy
  
• Advertising And Distribution
  
• Profitability
  
• Future Developments

11. The Future

• The Pensions Question
  
• Retirement At 70?
  
• £62bn Savings Gap
  
• Postponing The Reckoning With Credit
  
• Property Price Dangers
  
• The Outlook For Wealth
  
• Table 49: Savings And Investments In The Household Sector (£Bn), 1995 And 2000-2002
  
• Table 50: Forecast Wealth Of The Household Sector In The UK At Constant 2000 Prices (£Bn), 2000-2005
  
• Table 51: Estimated Value Of Household Sector Wealth In The UK At Constant 2000 Prices (£Bn And £), 18th July 2002
  
• Table 52: Estimated Holdings Of Savings And Investment Products In The UK By As And Bs At Constant 2000 Prices (% And £Bn), 2002 And 2005
  
• Figure 10: Estimated Holdings Of Savings And Investment Products In The UK By As And Bs At Constant 2000 Prices (£Bn), 2002 And 2005
  
• What Now For Financial Services?
  
• Need For Knowledgeable Staff
  
• Few Organisations To Watch
  
• Hastening The Death Of Life Companies

13. Further Sources

• Associations
  
• Publications
  
• General Sources
  
• Bonnier Information Sources
  
• Government Publications
  
• Other Sources

Abstract

This report examines the financial squeeze on people with middling incomes, the people who are losing their final-salary pensions, who are struggling to send children into higher education, and who risk losing almost all their assets if they need to go into long-term care. Employers and managers are increasing their disposable incomes at a faster rate than people in the professions. Key Note suggests that the increased social importance of income level means that the official socio-economic groupings based on the levels of professional knowledge and skill are, in practice, irrelevant. Despite rising incomes, even high-earners are reluctant to save. Only half of Great Britain's households admit to having savings of £1,500 or more. In 2002, an estimated 1% of adults held a quarter of all personal wealth, rising to 36% of wealth when dwellings are excluded.

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