Marketing to the Mass Affluent - US - November 2011
The effects of the economy on the mass affluent have been both psychological and behavioral. Certainly the prolonged recession and high unemployment rates have made many people pessimistic about the future of the economy, and the mass affluent are no different. The state of the economy has mass affluent investors—like all other investors—worried about putting money into the markets and it will be hard to convince them to overcome their fears, at least until the economy shows sustainable signs of recovery. They have made adjustments to their saving, spending and investing behavior that reflect their pessimism, attempting to save more and spend less. This report examines some of the characteristics of the mass affluent that will affect how companies can and should market to them in this difficult economy.
What you need to know:
- The economy has taken a toll on everyone, especially those close to retirement. Many mass affluents have had to pare down their lifestyles and adjust their expectations as a strong economic recovery has yet to appear. There is even some evidence that the mass affluent group is disappearing and being replaced by smaller segments defined by their ages, careers and income potential
- Mass affluents are keeping a lot of money on the sidelines invested in cash. That may make them feel safer right now, but it will hamper their ability to outpace inflation, and makes them vulnerable to the very real concern they have that they will outlive their savings
- Credit unions and banks, especially smaller ones, have an opportunity to make inroads into the mass affluent market. To do so, however, will require some adjustments in their strategies
- Younger mass affluents, while still cautious, are a little more optimistic than their older counterparts. They have learned by watching, however, and are committed to saving more money, spending less on discretionary purchases, and learning about investing. They do not want to experience the pain that some of their parents and grandparents have experienced over the last several years
- Many mass affluents, though preferring to make final investment decisions by themselves, are still open to receiving financial advice. They are somewhat less trusting of banks, however, and tend to prefer independent advisors
- The best way to reach mass affluents is somewhat dependent on the age that is targeted. Younger ones are more likely to be accessible via electronic media, primarily social networking sites and mobile advertising. Older ones are still more accessible via traditional media, but their use of social media and mobile devices is increasing
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