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Echo Boomers and Finance - US - September 2009

This report looks at this emerging generation, known as Echo Boomers, Gen Y or Millennials, and examines their aspirations, the challenges they face and their unmet needs. Echo Boomers represent the next generational bulge. More numerous than Gen Xers, these children of Baby Boomers are being groomed to take the place of their parents as a prime target for financial services marketers. This generation grew up during a time of prosperity, but Echo Boomers are entering the workforce and starting to establish households at a time of immense economic uncertainty.

Many Echo Boomers are digital natives. Even more so than Gen Xers, Echo Boomers are comfortable with online media and use the internet as a primary information source and use it for their social and commercial interactions. Marketing to these young adults means understanding the way they access information in today’s changing media environment.

This report seeks to address these questions and more:

  • What are the unique challenges facing Echo Boomers?
  • How has the economic crisis impacted these young Americans and what effect will this have for their future relationship with the financial system?
  • What financial products and services are of greatest interest to Echo Boomers?
  • What are the best ways to reach this market?

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Consumer survey data
        • Online surveys
          • Greenfield Online
            • Experian Simmons National Consumer Studies
              • Advertising Creative
                • Abbreviations and terms
                  • Abbreviations
                    • Companies mentioned in this report:
                    • Executive Summary

                      • Industry overview
                        • Market Size and Forecast
                          • Competitive Context
                            • Marketing Channels
                              • Market Drivers
                                • Innovations and Innovators
                                  • Advertising and Promotion
                                    • The Consumer
                                      • Cluster Analysis
                                      • Insights and Opportunities

                                        • What are the unique challenges facing Echo Boomers?
                                          • What effect will the financial crisis have for Echo Boomers’ future relationship with the financial system?
                                            • What financial products and services are of greatest interest to Echo Boomers?
                                              • What are the best ways to reach this market?
                                              • Inspire Insights

                                                  • Trend: The New Normal
                                                    • Current economic situation means changing outlook for young adults
                                                      • Credit is an increasing sore spot for Echo Boomers
                                                        • Trend: Dis-intermediation
                                                          • The internet is eliminating the middleman
                                                            • Consumers are generating their own news and advertising
                                                            • Market Size and Forecast

                                                              • Key points
                                                                • Who are Echo Boomers?
                                                                  • Echo Boomers are even more numerous than Baby Boomers
                                                                    • Banking product ownership increases rapidly as Echo Boomers mature
                                                                      • Figure 1: Banking products currently owned: Echo Boomers indexed to total, by age, February 2008-March 2009
                                                                      • Figure 2: Banking products currently owned: Younger vs. older Echo Boomers, February 2008-March 2009
                                                                    • Echo Boomers are just embarking on financial product ownership
                                                                      • Figure 3: Investment products/accounts currently owned: Younger vs. older Echo Boomers, February 2008-March 2009
                                                                      • Figure 4: Investment products/accounts currently owned: Echo Boomers indexed to total, by age, February 2008-March 2009
                                                                    • Echo Boomers aspire to greater ownership of financial products
                                                                      • Figure 5: Financial products own and plan to get: Echo Boomers indexed to total, February 2008-March 2009
                                                                  • Competitive Context

                                                                    • Key points
                                                                      • Financial services companies are beginning to reach out to younger adults
                                                                          • Figure 6: Direct mail, email, print campaigns mentioning “Echo Boomer/Gen Y/Generation Y/Millennial,” vs. “Gen X/Generation X,” vs. “baby boom/baby boomer,” June 2008-May 2009
                                                                      • Marketing Channels

                                                                        • Key points
                                                                          • The internet is displacing traditional media as an information source for Echo Boomers and Gen X
                                                                            • Figure 7: How the internet impacts getting product information and shopping, by generation, February 2008-March 2009
                                                                            • Figure 8: How the internet impacts use of other media, by generation, February 2008-March 2009
                                                                          • Financial services companies are shifting their advertising more and more to online media
                                                                            • Figure 9: Advertising expenditures for financial services companies, 2008
                                                                          • Echo Boomers have strong opinions about what they want in a website
                                                                            • Figure 10: Website attitudes, by generation, February 2008-March 2009
                                                                          • Newspapers face dismal prospects
                                                                            • Figure 11: Newspaper readership, by generation, 2006 vs. 2008
                                                                          • Marketers can still reach Echo Boomers via TV—although TV viewing modes are becoming more fragmented
                                                                            • Figure 12: Average number of hours spent per month watching TV/using internet, by age, Q3 2008
                                                                          • Direct mail can get through to Echo Boomers
                                                                              • Figure 13: Amount of weekly mail received per age group, 2003
                                                                          • Market Drivers

                                                                            • Key points
                                                                              • Echo Boomers represent the next generational bulge
                                                                                • Figure 14: U.S. population estimates, by generation, 2009
                                                                              • Echo Boomers are more diverse than previous generations
                                                                                • Figure 15: U.S. population estimates, by race/ethnicity, 2009
                                                                            • Innovation and Innovators

                                                                              • Key points
                                                                                • Credit unions are leading innovators when it comes to Echo Boomers
                                                                                  • Some banks are also portraying themselves as the anti-bank
                                                                                    • Some financial brands use social networking sites to engage Echo Boomers
                                                                                    • Advertising and Promotion

                                                                                      • Key points
                                                                                        • Managing credit
                                                                                          • Figure 16: Freecreditreport.com television advertisement, 2009
                                                                                        • No gimmicks
                                                                                          • Figure 17: Ally Bank television advertisement, 2009
                                                                                        • The unexpected: Introducing an element of chaos
                                                                                          • Figure 18: Nationwide insurance television advertisement, 2008
                                                                                        • Tech-savvy ads
                                                                                          • Figure 19: E*Trade television advertisement, 2008
                                                                                          • Figure 20: Chase credit card advertisement, 2008
                                                                                      • The Consumer

                                                                                        • Key points
                                                                                          • Echo Boomers already have a lot of financial concerns
                                                                                              • Figure 21: Primary financial concerns: Echo Boomers indexed to total population, June 2009
                                                                                            • Echo Boomers see themselves as unique and want to be treated as such
                                                                                              • Figure 22: Attitudes towards generational marketing, by age, June 2009
                                                                                            • Echo Boomers may be ahead of their older Gen X counterparts in savings
                                                                                              • Figure 23: Financial attitudes of Echo Boomers and Gen X, 2008
                                                                                            • Debt is already a problem for Echo Boomers but not as much as for Gen X
                                                                                              • Figure 24: Types of debt for Echo Boomers and Gen X, 2008
                                                                                              • Figure 25: Most important goal in next ten years for Echo Boomers and Gen X, 2008
                                                                                            • Echo Boomers are still optimistic about their future prospects
                                                                                                • Figure 26: Echo Boomer and Gen X perceptions of being behind schedule for key life milestones, 2008
                                                                                              • The economic downturn may have had less impact on Echo Boomers
                                                                                                  • Figure 27: Perceptions of whether achieved the American Dream, 2008 and 2009
                                                                                                  • Figure 28: Economic outlook: Echo Boomers indexed to total, February 2008-March 2009
                                                                                                  • Figure 29: Investment losses in past year, by age, February 2008-March 2009
                                                                                                • Echo Boomers admit lack of financial knowledge and discipline
                                                                                                  • Figure 30: Financial attitudes, by generation, February 2008-March 2009
                                                                                                • Echo Boomers are making financial adjustments in response to the economic crisis
                                                                                                    • Figure 31: Steps taken as a result of economic crisis, by generation, 2009
                                                                                                    • Figure 32: Steps plan to take or have taken as a result of economic crisis, by generation, 2009
                                                                                                  • The economic downturn may be the impetus for greater financial responsibility among young adults
                                                                                                    • Echo Boomers admit that they are not very knowledgeable about many financial basics
                                                                                                      • Echo Boomers are motivated to learn more about financial matters
                                                                                                          • Figure 33: How prepared Echo Boomers feel to make good financial choices, 2009
                                                                                                        • To some extent Echo Boomers see themselves as paying the price for their parents’ financial misdeeds
                                                                                                            • Figure 34: Financial attitudes: Echo Boomers indexed to total population, June 2009
                                                                                                          • Echo Boomers are not turning away from the financial system in response to the economic crisis
                                                                                                              • Figure 35: Changes in financial behavior as a result of economic crisis, by age, June 2009
                                                                                                            • Echo Boomers still display some unsound financial practices
                                                                                                              • Echo Boomers are willing to give financial institutions another chance
                                                                                                                • Figure 36: Level of trust for U.S. financial system, by generation, 2009
                                                                                                              • Word of mouth is very influential with Echo Boomers
                                                                                                                • Figure 37: Reasons for bank choice: Echo Boomers indexed to total population, June 2009
                                                                                                              • Banks need to work hard to maintain loyalty of Echo Boomers
                                                                                                                • Figure 38: Incidence of switching primary banks in the past 12 months, by age, June 2009
                                                                                                                • Figure 39: Reasons for switching primary bank in the 12 months: Echo Boomers indexed to total population, June 2009
                                                                                                              • Parents are still very influential sources of financial advice for Echo Boomers
                                                                                                                • Figure 40: Major sources of financial advice for Echo Boomers and Gen X, 2008
                                                                                                            • Cluster Analysis

                                                                                                                • Echo Boomers fall into three segments
                                                                                                                  • Figure 41: Echo Boomer finance clusters, June 2009
                                                                                                                • Worried Savers
                                                                                                                  • Who they are
                                                                                                                    • Opportunity
                                                                                                                      • Unconcerned, financially disinterested
                                                                                                                        • Who they are
                                                                                                                          • Opportunity
                                                                                                                            • Internet-savvy, financially connected
                                                                                                                              • Who they are
                                                                                                                                • Opportunity
                                                                                                                                  • Cluster characteristics
                                                                                                                                    • Figure 42: Echo Boomer finance clusters, June 2009
                                                                                                                                    • Figure 43: Agreement with statements about the economy and finances, by Echo Boomer finance clusters, June 2009
                                                                                                                                    • Figure 44: Agreement with statements about financial expectations, by Echo Boomer finance clusters, June 2009
                                                                                                                                    • Figure 45: primary financial concerns, by Echo Boomer finance clusters, June 2009
                                                                                                                                    • Figure 46: Deciding factors in choosing a bank, by Echo Boomer finance clusters, June 2009
                                                                                                                                    • Figure 47: Have you switched primary banks in the last 12 months?, by Echo Boomer finance clusters, June 2009
                                                                                                                                    • Figure 48: financial products currently owned or plan to buy in the near future (less than six months) or distant future (more than six months), by Echo Boomer finance clusters, June 2009
                                                                                                                                    • Figure 49: Resources used for financial advice, by Echo Boomer finance clusters, June 2009
                                                                                                                                    • Figure 50: Echo Boomer finance clusters, by gender, June 2009
                                                                                                                                    • Figure 51: Echo Boomer finance clusters, by age, June 2009
                                                                                                                                    • Figure 52: Echo Boomer finance clusters, by HH income, June 2009
                                                                                                                                    • Figure 53: Echo Boomer finance clusters, by race, June 2009
                                                                                                                                    • Figure 54: Echo Boomer finance clusters, by Hispanic origin, June 2009
                                                                                                                                    • Figure 55: Echo Boomer finance clusters, by education, June 2009
                                                                                                                                • Appendix: Trade Associations

                                                                                                                                  Companies Covered

                                                                                                                                  • Ally Financial Inc.
                                                                                                                                  • America's Community Bankers (ACB)
                                                                                                                                  • American Association of Retired Persons (AARP)
                                                                                                                                  • BITS
                                                                                                                                  • Charles Schwab Corporation
                                                                                                                                  • Community Financial Services Association of America (CFSA)
                                                                                                                                  • Consumer Bankers Association
                                                                                                                                  • Credit Union National Association
                                                                                                                                  • Edward D. Jones & Co., L.P.
                                                                                                                                  • Employee Benefit Research Institute
                                                                                                                                  • Facebook, Inc.
                                                                                                                                  • FMR Corp.
                                                                                                                                  • Greenfield Online
                                                                                                                                  • Independent Community Bankers of America
                                                                                                                                  • Interactive Advertising Bureau (US)
                                                                                                                                  • Investment Company Institute
                                                                                                                                  • MasterCard Incorporated
                                                                                                                                  • MetLife, Inc.
                                                                                                                                  • Morningstar, Inc.
                                                                                                                                  • MySpace.com
                                                                                                                                  • Nationwide Mutual Insurance Company
                                                                                                                                  • Social Security Administration
                                                                                                                                  • State Farm Insurance Companies
                                                                                                                                  • T. Rowe Price Group, Inc.
                                                                                                                                  • The American Bankers Association
                                                                                                                                  • The American Savings Education Council
                                                                                                                                  • The Financial Services Roundtable
                                                                                                                                  • The PNC Financial Services Group
                                                                                                                                  • The Vanguard Group, Inc.
                                                                                                                                  • Twitter, Inc.
                                                                                                                                  • U.S. Bureau of Labor Statistics
                                                                                                                                  • U.S. Bureau of the Census
                                                                                                                                  • Wachovia Corporation
                                                                                                                                  • Wells Fargo & Company
                                                                                                                                  • Yahoo! Inc
                                                                                                                                  • YouTube, Inc.

                                                                                                                                  Echo Boomers and Finance - US - September 2009

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