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Lifestage Marketing in Financial Services - US - January 2016

There are many ways to define a lifestage, including by age, marital status, or parental status. The financial needs of each lifestage are unique and financial institutions are always seeking ways to appeal to the needs of each one. While the recent recession affected everybody, it may have permanently altered the way Millennials, in particular, look at the financial world. This report examines the differences in the financial goals of each lifestage, how each gets information about financial services topics, what they are looking for from financial institutions, and how they make their decisions on which institutions to use – or not to use.

This report examines the following areas:

  • America is aging
  • Different generations use different media channels

This report covers how people in various stages of life define their financial goals and what they are doing to reach them. It also includes a discussion of how people get their financial information and the media channels most likely to elicit a response. The technology people use to conduct their financial transactions and those they plan to use in the future is also discussed.

For the purposes of this report, Mintel has defined “lifestage” primarily as generation, but at times as marital status and parental status as well.

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • The issues
          • America is aging
            • Figure 1: Growth in US population, by age, 2015 versus 2025
          • Different generations use different media channels
            • Figure 2: Sources of financial information, by generation, October 2015
          • The opportunities
            • Focus on retirement planning and income distribution
              • Figure 3: Amount in retirement account(s), by generation, May 2015
            • Millennials want to save for children’s education
              • Figure 4: Millennials interested in education savings account, by type of goal, October 2015
            • Few believe they have enough life insurance
              • Figure 5: Life insurance ownership, by generation, October 2015
              • Figure 6: Buying life insurance as a goal, by generation, October 2015
            • What it means
            • The Market – What You Need to Know

              • An aging population
                • More older people will continue working
                  • Most – but not all – are doing better financially
                    • Unemployment continues to improve
                      • Debt is still a challenge
                      • Market Breakdown

                        • An aging America
                          • Figure 7: US population by age, 2015, 2020, 2525
                        • Labor force participation
                          • Figure 8: Labor force participation by age, 1992, 2002, 2012, 2022 (projected)
                      • Market Factors

                        • Most – but not all – are doing better financially
                          • Figure 9: Average income and average expenditures, by age, 2014
                        • Unemployment headed down for all generations
                          • Figure 10: US unemployment rate October 2014-October 2015
                        • Debt is still an issue
                          • Figure 11: Total debt distribution, Q2 2013-Q2 2015
                      • Key Players – What You Need to Know

                        • Tech tools are popular among all generations
                          • Expanded use of video
                            • Gen X – the “lost” generation
                            • What’s Working?

                              • Tech tools are useful to all generations
                                • Figure 12: Vanguard Personal Advisor Services online ad, 2015
                              • Expanded use of video
                                • Figure 13: Interested in financial education videos, by generation, November 2014
                            • What’s Struggling?

                              • Gen X – the “lost” generation
                                • Figure 14: Switched primary checking account provider, by generation, November 2014
                                • Figure 15: US population distribution, by generation, 2015, 2020
                            • The Consumer – What You Need to Know

                              • Different priorities for different lifestages
                                • Young people get information from a wider variety of media
                                  • Incentives may help increase mobile payment system usage
                                    • Young people are looking for advice alternatives
                                      • Location is still the most important feature in a bank
                                      • Key Financial Goals

                                          • Short-term goals: paying debt and saving
                                            • Figure 16: Most popular short-term goals, October 2015
                                          • Eliminating debt versus saving for retirement
                                            • Figure 17: Short-term goals, by generation, October 2015
                                          • Being a parent changes financial priorities
                                            • Figure 18: Short-term goals, by gender and parental status, October 2015
                                          • Advice and short-term goals
                                            • Figure 19: Interest in adviser for short-term goals, October 2015
                                          • Medium-term goals: save money for the longer term
                                            • Figure 20: Medium-term goals, October 2015
                                          • Older Millennials are increasingly focused on their finances
                                            • Figure 21: Medium-term goals, by generation, October 2015
                                          • Income impacts engagement with finances
                                            • Figure 22: Medium-term goals, by age and household income, October 2015
                                          • Advice is needed for medium-term goals
                                            • Figure 23: Interest in adviser for medium-term goals, October 2015
                                          • Long-term goals: dominated by retirement
                                            • Figure 24: Long-term goals, October 2015
                                          • iGens are planning for the long term
                                            • Figure 25: Long-term goals, by generation, October 2015
                                          • Singles are looking forward
                                            • Figure 26: Long-term goals, by marital status, October 2015
                                          • Few want advisers to help with long-term goals
                                            • Figure 27: Interest in adviser for long-term goals, October 2015
                                          • Consumers’ goals in their own words
                                            • Millennials
                                              • Older Millennials/Younger Gen Xers
                                                • Older Gen Xers/Early Baby Boomers
                                                  • Late Baby Boomers/WWII/Swing Generations
                                                  • Source of Financial Information

                                                    • Young people get information from a wider variety of media
                                                      • Figure 28: Top five sources of financial information, by generation, October 2014
                                                      • Figure 29: Navy Federal Credit Union online ad, 2015, Capital One 360 email, 2015
                                                    • Millennial men are easier to reach than are Millennial women
                                                      • Figure 30: Sources of financial information, by gender and generation, October 2015
                                                    • Hispanics are easier to reach
                                                      • Figure 31: Sources of financial information, by Hispanic origin, October 2015
                                                    • Use television to reach Blacks
                                                      • Figure 32: Sources of financial information, by race, October 2015
                                                  • Responses to Financial Services Ads

                                                    • Television is still relevant
                                                      • Millennials
                                                        • Older Millennials/Younger Gen Xers
                                                          • Older Gen Xers/Early Baby Boomers
                                                            • Late Baby Boomers/WWII/Swing Generations
                                                              • Ads need to focus on benefits and build trust
                                                                • Millennials
                                                                  • Older Gen Xers/Early Baby Boomers
                                                                    • Late Baby Boomers/WWI/Swing Generations
                                                                      • Millennials are most responsive to advertising
                                                                        • Figure 33: Responses to financial services ad, by generation, October 2015
                                                                      • Men are more likely to respond to financial ads
                                                                        • Figure 34: Responses to financial services ad, by generation, October 2015
                                                                    • What Consumers Want from Financial Institutions

                                                                      • Financial understanding increases with age – and so does the use of an adviser
                                                                        • Figure 35: Betterment online ad, 2015
                                                                      • There is opportunity for advisers at all lifestages
                                                                          • Figure 36: Understanding of financial topics, by generation, October 2015
                                                                        • Women are far less confident than men
                                                                            • Figure 37: Understanding of financial topics, by gender and age, October 2015
                                                                          • Bundling may attract Millennials
                                                                            • Figure 38: Choosing a financial institution, by gender and age, October 2015
                                                                          • Hispanics more likely to choose institution carefully
                                                                            • Figure 39: Choosing a financial institution, by Hispanic origin, October 2015
                                                                            • Figure 40: BankAmeriDeal email ad, 2015
                                                                            • Figure 41: BofA Preferred Rewards direct mail ad, 2015
                                                                          • Asians and Hispanics need life insurance
                                                                            • Figure 42: Have enough life insurance to protect family, by race and Hispanic origin, October 2014
                                                                        • The Attraction of Technology

                                                                          • Millennials are most interested in internet-only banks
                                                                            • Figure 43: Current use and future use of internet-only bank, by generation, October 2014
                                                                            • Figure 44: Ally Bank print ad, 2015
                                                                          • Parents – especially dads – like internet-only banks
                                                                            • Figure 45: Current use and future use of internet-only bank, by parental status and presence of children, October 2015
                                                                            • Figure 46: Ally Bank banner ad, 2015
                                                                          • Incentives will help drive mobile payment systems usage
                                                                            • Figure 47: Current and future use of mobile payment systems, by generation, October 2015
                                                                          • Income matters, too
                                                                            • Figure 48: Current and future use of internet-only bank, by age and household income, October 2015
                                                                          • Mobile payment growth may be challenged
                                                                            • Figure 49: Current and future use of mobile payment system, by age and household income, October 2015
                                                                          • Parents are a prime market
                                                                            • Figure 50: Current and future use of mobile payment system, by age and household income, October 2015
                                                                          • How technology has changed banking
                                                                            • Millennials
                                                                              • Older Millennials/Younger Gen Xers
                                                                                • Older Gen Xers/Early Baby Boomers
                                                                                  • Late Baby Boomers/WWI/Swing Generations
                                                                                  • Plans for Handling Finances

                                                                                    • The need for advice is clear
                                                                                      • Figure 51: Financial planning activities, by generation, August 2015
                                                                                    • Parents are looking for advice
                                                                                      • Figure 52: Interest in financial adviser, by parental status, October 2015
                                                                                    • Young people are looking for alternatives to traditional financial services
                                                                                      • Advice
                                                                                        • Figure 53: Interest in financial advice, by generation, October 2015
                                                                                      • Banks
                                                                                        • Figure 54: Interest in alternative banks, by generation, October 2015
                                                                                      • Advice people already use
                                                                                        • Millennials
                                                                                          • Late Baby Boomers/WWI/Swing Generations
                                                                                          • Important Features in a Financial Institution

                                                                                            • Location is still the most important feature
                                                                                              • Different generations seek out different features
                                                                                                • Figure 55: Five most important features in a financial institution, by generation, October 2015
                                                                                              • Priorities of different generations
                                                                                                • Millennials
                                                                                                  • Older Millennials/Younger Gen Xers
                                                                                                    • Older Gen Xers/Early Baby Boomers
                                                                                                      • Late Baby Boomers/WWII/Swing Generations
                                                                                                        • Parents and non-parents have different priorities
                                                                                                          • Figure 56: Five most important features in a financial institution, by parental status, October 2015
                                                                                                        • Hispanics actively look for information
                                                                                                          • Figure 57: Features important in a financial institution, by Hispanic origin, October 2015
                                                                                                      • Attitudes toward Personal Finances

                                                                                                        • Financial security is of paramount importance
                                                                                                          • Figure 58: Financial priorities, by generation, October 2015
                                                                                                        • Life circumstances change priorities
                                                                                                          • Millennials
                                                                                                            • Older Millennials/Younger Gen Xers
                                                                                                              • Older Gen Xers/Early Baby Boomers
                                                                                                                • Late Baby Boomers/Swing/WWII generation
                                                                                                                  • Attitudes toward financial services industry and institutions
                                                                                                                    • The advice industry needs to adapt
                                                                                                                      • Figure 59: Attitudes toward financial industry and institutions, by generation, October 2015
                                                                                                                    • Attitudes toward financial tools
                                                                                                                      • Security
                                                                                                                        • Figure 60: Attitudes toward financial tools, by generation, October 2015
                                                                                                                      • Attitude toward own personal financial situation
                                                                                                                        • Figure 61: Optimism about own personal financial situation, by generation, October 2015
                                                                                                                      • Optimism is highest among young high earners
                                                                                                                        • Figure 62: Outlook on personal financial situation, by age and household income, October 2015
                                                                                                                      • Hispanics and Blacks are more optimistic
                                                                                                                        • Figure 63: Outlook on personal financial situation, by Hispanic origin and race, October 2015
                                                                                                                    • What’s More Important: Money or Time?

                                                                                                                        • Millennials
                                                                                                                          • Older Millennials/Younger Gen Xers
                                                                                                                            • Older Gen Xers/Early Baby Boomers
                                                                                                                              • Late Baby Boomers/WWII/Swing generations
                                                                                                                              • Appendix – Data Sources and Abbreviations

                                                                                                                                • Data sources
                                                                                                                                  • Consumer survey data
                                                                                                                                    • Consumer qualitative research
                                                                                                                                      • Direct marketing creative
                                                                                                                                        • Abbreviations and terms
                                                                                                                                          • Abbreviations
                                                                                                                                          • Appendix – Consumer

                                                                                                                                            • Most important features in a financial institution
                                                                                                                                              • Figure 64: Five most important features in a primary financial institution, by demographics, October 2015
                                                                                                                                            • Have enough life insurance
                                                                                                                                              • Figure 65: Believe have enough life insurance, by demographics, October 2015

                                                                                                                                          Companies Covered

                                                                                                                                          To learn more about the companies covered in this report please contact us.

                                                                                                                                          Lifestage Marketing in Financial Services - US - January 2016

                                                                                                                                          £3,277.28 (Excl.Tax)