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Marketing Financial Services to the Mass Affluent - US - December 2015

Marketing Financial Services to the Mass Affluent - US - December 2015

"The mass affluent market is largely untapped by traditional financial services providers and provides great opportunity for institutions to expand their customer base. Less than one third of mass affluent consumers regularly work with a financial advisor, yet their financial needs are substantial and diverse. New strategies and technologies can help providers serve this group profitably despite account balances that are lower than the traditional audience of affluent and high net worth households."

- Monica Staco, Category Manager - Financial Services

This report discusses the following key topics:

More than 22 million mass affluent households in possible need of financial guidance
Consumer attitudes are improving and more feeling optimistic
Retirement is greatest concern


OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY
The issues
Figure 1: Number of mass affluent households, 2010-20
Figure 2: Attitudes about personal economy, any agree, September 2015
Figure 3: Financial challenges, all, September 2015
The opportunities
Figure 4: Use of financial advisors, by wealth segment, September 2015
Figure 5: Attitudes toward financial services technology, by generation, September 2015
Figure 6: Attitudes about personal economy, by age, September 2015
What it means
THE MARKET
What you need to know
Over 22 million mass affluent households with assets above $100K
Retiring Baby Boomers facing new challenges and needs
401(k) market rollovers provide opportunity
Millennials overtake Baby Boomers in number
Retirement crisis looming for many households
Market size and forecast
More than 22 million mass affluent households with assets above $100K
Figure 7: US households, by value of income-producing assets (IPA), 2015
Figure 8: Number of mass affluent households, 2010-20
Market factors
Retiring Baby Boomers facing new challenges and needs
Figure 9: Total US population distribution, by age, 2010-20
401(k) market rollovers provide opportunity
Figure 10: Fidelity online ad, 2015
Millennials overtake Baby Boomers in number
Retirement crisis looming for many households
Figure 11: Amount in retirement savings, January 2015
KEY PLAYERS
What you need to know
PFM tools within easy reach for mass affluent consumers
Need to improve outreach to Black and female consumers
Robo-advisors bring changing service models
What’s working?
PFM tools within easy reach for mass affluent consumers
Figure 12: Attitudes toward financial services technology, by generation, September 2015
Bank PFM offerings compete with third-party sites such as Mint.com
Figure 13: Sun Trust print ad, 2015
Figure 14: BMO Financial Group email ad, 2015
Figure 15: Wells Fargo email ad, 2015
Figure 16: Personal Capital online ad, 2015
What’s struggling?
Black community underserved by advisors
Figure 17: Use of financial advisors, by race/Hispanic origin, September 2015
Black consumers weary of paying fee
Figure 18: Financial services behaviors, by race/Hispanic origin, September 2015
It’s a man’s world…though not really
Figure 19: Household financial decisions process, by gender, September 2015
Women aged 35-54 less interested in financial planning
Figure 20: Financial services behaviors, by age and gender, September 2015
What’s next?
Betterment, Wealthfront, and the rise of robos
Figure 21: Betterment home page, 2015
Traditional players get into robo segment
Figure 22: Charles Schwab email ad, 2015
Ultimate impact on industry may be changes to the service model
THE CONSUMER
What you need to know
Mass affluent consumers exist at every age
Mass affluent focused on saving and investing, but many without plan
Plenty of opportunity for financial advisors to gain market share
Opportunity arises as online tools become commonplace
Consumer attitudes are improving
Retirement is greatest concern
Millennials interested in financial plan
Household investable assets and net worth
Nearly 40% of households have $100K-$1 million investable assets
Figure 23: Household investable assets, all, September 2015
Much household net worth held in value of home
Figure 24: Household net worth, all, September 2015
Mass affluent consumers exist at every age
Figure 25: Household investable assets, by generation, September 2015
Consumers harder to reach as wealth increases
Figure 26: Websites visited daily, by household investable assets, September 2015
LinkedIn attractive avenue for social media
Figure 27: Social media sites visited daily, by household investable assets, September 2015
One-quarter of Hispanics have investable assets of $100K-499K
Figure 28: Household investable assets, by race/Hispanic origin, September 2015
Financial decision making
Financial decision making is rarely shared
Figure 29: Household financial decisions process, all, September 2015
Men more likely to make financial decisions, but not entirely
Figure 30: Household financial decisions process, by gender, September 2015
Fathers making decisions and present opportunity
Figure 31: Household financial decisions process, by parental status, September 2015
Hispanics very likely to make all decisions themselves
Figure 32: Household financial decisions process, by race/Hispanic origin, September 2015
Attitudes toward financial services technology
Opportunity for education as online tools become commonplace
Figure 33: Attitudes toward financial services technology, all, September 2015
Mobile/online services most important to younger consumers
Figure 34: Attitudes toward financial services technology, by generation, September 2015
Parents far more likely to seek online management tools
Figure 35: Attitudes toward financial services technology, by parental status, September 2015
Hispanics more likely to use online management tools and videos
Figure 36: Attitudes toward financial services technology, by Hispanic origin, September 2015
Attitudes about personal economy
Consumer attitudes are improving
Figure 37: Attitudes about personal economy, all, September 2015
Young women not as confident their retirement is on track
Figure 38: Attitudes about personal economy, by gender and age, September 2015
Older consumers less confident about their financial standing
Figure 39: Attitudes about personal economy, by age, September 2015
Hispanics feeling more financially secure than before
Figure 40: Attitudes about personal economy, all, September 2015
Use of financial advisors
Plenty of opportunity for financial advisors to gain market share
Figure 41: Use of financial advisors, all, September 2015
45-54-year-olds present significant opportunity for advisors
Figure 42: Use of financial advisors, by age, September 2015
Mass affluent consumers least likely to use financial advisor
Figure 43: Use of financial advisors, by wealth segment, September 2015
Black consumers slightly more underserved by advisors
Figure 44: Use of financial advisors, by race/Hispanic origin, September 2015
Greatest financial challenges
Retirement is greatest concern
Figure 45: Financial challenges, all, September 2015
Millennials interested in financial plan
Figure 46: Financial challenges, by generation, September 2015
Education and day-to-day needs a concern for parents
Figure 47: Financial challenges, by parental status, September 2015
Black consumers want to build an emergency fund
Figure 48: Financial challenges, by race/Hispanic origin, September 2015
Financial attitudes
Focus shifting toward growth and investment
Figure 49: Financial services behaviors, all, September 2015
Mass affluent focused on saving and investing, but many without plan
Figure 50: Financial services behaviors, by wealth segment, September 2015
Many parents willing to pay a fee and receive communications
Figure 51: Financial services behaviors, by parental status, September 2015
Hispanics engage online
Figure 52: Financial services behaviors, by race/Hispanic origin, September 2015
APPENDIX
Data sources and abbreviations
Data sources
Abbreviations and terms
CHAID analysis
Methodology
Millennial parents feeling financially secure
Figure 53: Financial security – CHAID – Tree output, September 2015
Figure 54: Online communications – CHAID – Tree output, September 2015
Figure 55: Attitudes toward financial services – CHAID – Table output, September 2015
RESEARCH METHODOLOGY
US Research Methodology
Consumer research
Social Media Research
Trade research
Statistical Forecasting

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