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Gen X Finance - US - June 2009

Gen Xers represent a prime target for financial services companies as they establish households, start raising families, buy homes, and plan for their children’s education and their own retirements. For decades, Baby Boomers have been in the limelight, but Gen Xers are set to take center stage. However, many firms are still focused on Baby Boomers, and others are eager to cater to the up and coming Gen Y crowd.

Gen Xers have been particularly hard hit by the current economic crisis. They are saddled with a high amount of debt and many have not yet accumulated much in the way of a safety net. Gen Xers came of age in a time of rapidly changing technology and media. 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 Gen Xers?
  • 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 Gen Xers?
  • What are the best ways to reach this market?
  • What are important differences that exist within the Gen X market, demographically and attitudinally?

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Table of contents

  1. Scope and Themes

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

                        • Industry overview
                          • Market size and forecast
                            • Competitive context
                              • Marketing channels
                                • Market drivers
                                  • Advertising and promotion
                                    • The Gen X consumer
                                      • Cluster analysis
                                        • Custom consumer groups
                                        • Insights and Opportunities

                                          • What are the unique challenges facing Gen Xers?
                                            • What effect will the financial crisis have for Gen Xers’ future relationship with the financial system?
                                              • What financial products and services are of greatest interest to Gen Xers?
                                                • What are the best ways to reach this market?
                                                  • What are the important differences that exist within the Gen X market, demographically and attitudinally?
                                                  • Inspire Insights

                                                      • Trend: Life after credit
                                                        • Trend: Rebuilding trust
                                                          • Trend: Disintermediation
                                                          • Market Size and Forecast

                                                            • Key points
                                                              • Who are Gen X?
                                                                • Gen Xers are caught unprepared for financial crisis
                                                                  • Figure 1: Financial products owned and value of holding for Gen X and baby boomer households, 2007
                                                                  • Figure 2: Financial products currently owned: Gen Xers indexed to total, March 2009
                                                                  • Figure 3: Median debt levels and ratio of debt payments to family income for households by age in 2007 dollars
                                                                • Gen Xers aspire to greater ownership of financial products
                                                                  • Figure 4: Financial products to be purchased in the near future: Gen Xers indexed to total, March 2009
                                                                  • Figure 5: Agreement with statement “it is important to be well-insured when it comes to life insurance”, by age, 2008
                                                              • Competitive Context

                                                                • Key points
                                                                  • Financial services companies are beginning to reach out to Gen Xers
                                                                    • However, financial services firms are still more focused on Boomers than Gen X
                                                                      • Figure 6: Direct mail, email, print campaigns mentioning “baby boom/baby boomer” versus those mentioning “Generation X/Gen X”, January 2007 to February 2009
                                                                  • Marketing Channels

                                                                    • Key points
                                                                      • The internet is displacing traditional media as an information source for Gen X and Gen Y
                                                                        • Figure 7: How the internet impacts getting product information and shopping, by generation, 2008
                                                                        • Figure 8: How internet has impacted use of other media, by generation, 2008
                                                                      • Financial services companies are shifting their advertising more to online media
                                                                        • Figure 9: Advertising expenditures for financial services companies, 2008
                                                                      • Gen Xers have strong opinions about what they want in a website
                                                                        • Figure 10: Website attitudes, by generation, 2008
                                                                      • Newspapers face dismal prospects
                                                                        • Figure 11: Newspaper readership, by generation, 2006 versus 2009
                                                                      • Marketers can still reach Gen X and Gen Y via TV
                                                                        • Figure 12: Average number of hours spent per month watching TV/using internet, by age, Q3 2008
                                                                      • Direct mail can get through even to Gen Xers
                                                                      • Market Drivers

                                                                        • Key points
                                                                          • Gen Xers are more diverse than previous generations
                                                                            • Figure 13: US population estimates, December 2007
                                                                          • Gen Xers are catching up to Baby Boomers in terms of size
                                                                            • Figure 14: Forecast of population for generation x and baby boomers, 2010 to 2030
                                                                          • Gen X may soon be pushed aside by Gen Y, the next generational bulge
                                                                            • Figure 15: US population estimates, by generation, November 2008
                                                                        • Advertising and Promotion

                                                                          • Key points
                                                                            • Freedom to spend and buy what you want now
                                                                              • Figure 16: MasterCard “Priceless” TV ad, 2008
                                                                            • Introducing an element of chaos
                                                                              • Figure 17: Nationwide “Life comes at you fast” TV ad, 2008
                                                                            • Tech-savvy ads
                                                                              • Figure 18: E*Trade TV ad, 2008
                                                                              • Figure 19: Chase credit card TV ad, 2008
                                                                            • Starting to invest
                                                                              • Figure 20: Schwab “Talk to Chuck” TV ad, 2008
                                                                            • Breaking the rules
                                                                              • Figure 21: Bank of America TV ad, 2008
                                                                          • The Consumer

                                                                            • Key points
                                                                              • Gen Xers have a lot on their plate
                                                                                  • Figure 22: Primary financial concerns: Gen X indexed to total population, March 2009
                                                                                  • Figure 23: Attitudes towards generational marketing, by age group, March 2009
                                                                                • Gen Xers actually may be lagging their younger Gen Y counterparts in savings
                                                                                  • Figure 24: Financial attitudes of Gen X and Gen Y, 2008
                                                                                  • Figure 25: Types of debt for Gen X and Gen Y, 2008
                                                                                  • Figure 26: Most important goal in next 10 years, Gen X and Gen Y, 2008
                                                                                  • Figure 27: Gen X and Gen Y perceptions of being behind schedule for key life milestones, 2008
                                                                                • Debt may put retirement for Gen Xers in jeopardy
                                                                                  • Gen Xers face lower living standards
                                                                                      • Figure 28: Perceptions of whether achieved the American dream, by generation, 2008 and 2009
                                                                                    • Gen Xers admit lack of financial discipline
                                                                                      • Figure 29: Financial attitudes, by generation, 2008
                                                                                    • Gen Xers are the most vulnerable group when it comes to job loss
                                                                                      • Figure 30: Perceived impact of job loss, by generation, 2009
                                                                                    • Gen Xers are making financial adjustments in response to the economic crisis
                                                                                        • Figure 31: Steps taken as a result of the economic crisis, by generation, 2009
                                                                                        • Figure 32: Steps respondents plan to take, or have taken as a result of economic crisis, by generation, 2009
                                                                                      • Gen Xers express greater optimism about their own financial outlook
                                                                                        • Figure 33: Economic outlook: Gen X indexed to total, 2008
                                                                                      • Gen Xers are stressed about finances
                                                                                        • Figure 34: Financial attitudes: Gen X indexed to total population, March 2009
                                                                                      • Gen Xers are paying down debt
                                                                                        • Figure 35: Changes in financial behavior as a result of economic crisis, by age group, May 2009
                                                                                        • Figure 36: How would spend stimulus check: Gen X indexed to total population, March 2009
                                                                                        • Figure 37: How stimulus check was spent in 2008: Gen X indexed to total population, March 2009
                                                                                      • Financial institutions need to win back trust
                                                                                        • Figure 38: Level of trust in U.S. financial system, by generation, 2009
                                                                                      • Bank stability is important but still not as important as convenient location
                                                                                        • Figure 39: Reasons for bank choice: Gen X indexed to total population, March 2009
                                                                                      • Gen Xers switch banks to get better online services
                                                                                          • Figure 40: Incidence of switching primary banks in the past 12 months, by age, March 2009
                                                                                          • Figure 41: Reasons for switching primary bank in the past 12 months: Gen X indexed to total population, March 2009
                                                                                        • Only a minority of Gen Xers consult with a financial professional
                                                                                          • Figure 42: Major sources of financial advice for Gen X and Gen Y, 2008
                                                                                      • Cluster Analysis

                                                                                        • Key points
                                                                                            • Figure 43: Gen X finance clusters, March 2009
                                                                                          • Casuals
                                                                                            • Who they are
                                                                                              • Opportunity
                                                                                                • Responsibles
                                                                                                  • Who they are
                                                                                                    • Opportunity
                                                                                                      • The Timids
                                                                                                        • Who they are
                                                                                                          • Opportunity
                                                                                                            • Cluster characteristics
                                                                                                              • Figure 44: Attitudes towards household financial characteristics and goals, by Gen X finance clusters, March 2009
                                                                                                              • Figure 45: Primary household financial concerns, by Gen X finance clusters, March 2009
                                                                                                              • Figure 46: Reasons for choosing primary bank, by Gen X finance clusters, March 2009
                                                                                                              • Figure 47: Have you switched primary banks in the last 12 months?, by Gen X finance clusters, March 2009
                                                                                                              • Figure 48: Type of financial products owned, by Gen X finance clusters, March 2009
                                                                                                              • Figure 49: Type of products respondent plans to buy in the near future, by Gen X finance clusters, March 2009
                                                                                                            • Cluster demographics
                                                                                                              • Figure 50: Gen X finance clusters, by gender, March 2009
                                                                                                              • Figure 51: Gen X finance clusters, by age group, March 2009
                                                                                                              • Figure 52: Gen X finance clusters, by income group, March 2009
                                                                                                              • Figure 53: Gen X finance clusters, by race, March 2009
                                                                                                              • Figure 54: Gen X finance clusters, by Hispanic origin, March 2009
                                                                                                            • Cluster methodology
                                                                                                            • Custom Consumer Groups

                                                                                                              • Key points
                                                                                                                • Priorities differ for different demographic subgroups within Gen X
                                                                                                                    • Figure 55: Financial priorities of Gen X, by household income, March 2009
                                                                                                                    • Figure 56: Financial priorities of Gen X, by race and Hispanic origin, March 2009
                                                                                                                    • Figure 57: Financial priorities of Gen X, by gender, March 2009
                                                                                                                  • Financial attitudes also differ by demographic group
                                                                                                                    • Figure 58: Financial attitudes of Gen X, by household income, March 2009
                                                                                                                    • Figure 59: Financial attitudes of Gen X, by race and Hispanic origin status, March 2009
                                                                                                                    • Figure 60: Financial attitudes of Gen X, by gender, March 2009
                                                                                                                • Appendix: Trade Associations

                                                                                                                  Companies Covered

                                                                                                                  • AIG Group (American International Group Inc)
                                                                                                                  • America's Community Bankers (ACB)
                                                                                                                  • American Association of Retired Persons (AARP)
                                                                                                                  • American Fidelity Assurance Company
                                                                                                                  • Bank of America Corporation
                                                                                                                  • BITS
                                                                                                                  • Centers for Medicare & Medicaid Services
                                                                                                                  • Charles Schwab Corporation
                                                                                                                  • Consumer Bankers Association
                                                                                                                  • Credit Union National Association
                                                                                                                  • Edward D. Jones & Co., L.P.
                                                                                                                  • Employee Benefit Research Institute
                                                                                                                  • Facebook, Inc.
                                                                                                                  • Federal Reserve System
                                                                                                                  • Greenfield Online
                                                                                                                  • HSBC USA Inc.
                                                                                                                  • Independent Community Bankers of America
                                                                                                                  • Investment Company Institute
                                                                                                                  • MasterCard Incorporated
                                                                                                                  • Merrill Lynch & Co. Inc
                                                                                                                  • MetLife, Inc.
                                                                                                                  • MySpace.com
                                                                                                                  • Nationwide Financial Services, Inc.
                                                                                                                  • Social Security Administration
                                                                                                                  • State Farm Insurance Companies
                                                                                                                  • The American Bankers Association
                                                                                                                  • The American Financial Services Association
                                                                                                                  • The American Savings Education Council
                                                                                                                  • The Financial Services Roundtable
                                                                                                                  • The PNC Financial Services Group
                                                                                                                  • The Vanguard Group, Inc.
                                                                                                                  • U.S. Bureau of Labor Statistics
                                                                                                                  • U.S. Bureau of the Census
                                                                                                                  • UBS Financial Services Inc.
                                                                                                                  • Wachovia Corporation
                                                                                                                  • YouTube, Inc.

                                                                                                                  Gen X Finance - US - June 2009

                                                                                                                  £3,199.84 (Excl.Tax)