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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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Table of contents

  1. Scope and Themes

      • What you need to know
        • Data sources
          • Consumer survey data
            • Advertising creative
              • Abbreviations and terms
                • Abbreviations
                  • Companies mentioned in this report
                  • Executive Summary

                    • Industry overview
                      • The shrinking mass affluent
                        • The economy is a major roadblock
                          • Baby Boomers are particularly concerned
                            • Technology has made it easier to reach mass affluents
                              • Reaching mass affluents requires an integrated strategy
                                • Trust continues to be an issue for mass affluents
                                  • Increased globalization of economies offers opportunity overseas
                                    • Marketing strategies are changing
                                    • Insights and Opportunities

                                        • Key points
                                          • Banks can attract mass affluent, but need to make changes
                                            • Figure 1: Most trusted provider of financial advice, August 2011
                                            • Figure 2: Comfort level with banks, 2008-11
                                          • Smaller banks may be in a stronger position
                                            • Mass affluent are seeking help…
                                              • …and retirement is coming up fast
                                                • Mass affluent retirees are buying variable annuities
                                                  • Younger people
                                                    • Building trust is crucial
                                                      • Figure 3: Companies most trusted by mass affluents, July 2011
                                                      • Figure 4: Mutual fund/brokerage company used by mass affluents, Feb. 2010-March 2011
                                                    • Mass affluent interested in investing overseas
                                                      • Millennials
                                                        • Who are the mass affluent?
                                                            • Figure 5: Percentage of Americans in each mass affluent segment, May 2011
                                                        • Inspire Insights

                                                            • Trend: Access All Areas
                                                              • Trend: Prepare for the Worst
                                                              • Market Size

                                                                • Key points
                                                                  • How many mass affluent are there?
                                                                    • How much do they earn?
                                                                      • Figure 6: Income distribution of mass affluents, by age, August 2011
                                                                    • Wealth in America
                                                                      • Figure 7: Liquid assets of mass affluents, Dec. 2010
                                                                      • Figure 8: Median income in U.S., 2000-10 (in 2010 adjusted dollars)
                                                                      • Figure 9: Distribution of households by household income, 2000-10
                                                                      • Figure 10: Family net worth, 1998-2007
                                                                  • Competitive Context

                                                                    • Key points
                                                                      • Credit unions getting more active
                                                                      • Marketing Channels

                                                                        • Key points
                                                                          • Social media is an increasingly important part of the mix
                                                                              • Figure 11: Top social media sites, August 2011
                                                                            • Twitter becoming more popular
                                                                              • Figure 12: Twitter usage by age, November 2010-May 2011
                                                                              • Figure 13: Twitter usage, by gender, age, race/ethnicity, and income, April-May 2011
                                                                            • Cell phones
                                                                              • Tablets
                                                                                  • Figure 14: Household income for total sample vs. tablet users, June 2011
                                                                              • Market Drivers

                                                                                • Key points
                                                                                  • The economy
                                                                                    • Unemployment
                                                                                      • Figure 15: Share of the unemployed who found jobs by weeks of unemployment, annual averages, 2000-10
                                                                                    • Wide range of concerns
                                                                                      • Mass affluents need help
                                                                                        • Optimism, however slight, among younger groups
                                                                                          • Figure 16: Attitudes about current personal financial situation, by age, February 2010-March 2011
                                                                                          • Figure 17: Outlook for future personal financial situation, by age, February 2010-March 2011
                                                                                        • Debt is a concern
                                                                                        • Leading Companies

                                                                                          • Key points
                                                                                            • Bank of America Merrill Lynch
                                                                                              • Ameriprise
                                                                                              • Innovations and Innovators

                                                                                                • Key points
                                                                                                  • Personal Capital Corp.
                                                                                                    • John Hancock
                                                                                                      • The Hartford
                                                                                                      • Marketing Strategies

                                                                                                        • Key points
                                                                                                          • Print advertising
                                                                                                            • Figure 18: Fidelity print ad, September 2011
                                                                                                            • Figure 19: KeyBank print ad, 2011
                                                                                                            • Figure 20: Wells Fargo print ad, August 2011
                                                                                                          • Direct mail advertising
                                                                                                            • Figure 21: American Express, September 2011
                                                                                                            • Figure 22: Merrill Edge direct mail piece, 2011
                                                                                                            • Figure 23: Direct mail piece from Wells Fargo, September 2011
                                                                                                          • Online and email advertising
                                                                                                            • Figure 24: TD Ameritrade email advertisement, September 2011
                                                                                                            • Figure 25: Vanguard Email advertisement, September 2011
                                                                                                            • Figure 26: Merrill Edge online ad, September 2011
                                                                                                            • Figure 27: Oppenheimer online ad, September 2011
                                                                                                          • Television advertising
                                                                                                            • Figure 28: Merrill Lynch Wealth Management television ad, 2011
                                                                                                            • Figure 29: Fidelity television ad, 2011
                                                                                                            • Figure 30: Northern Trust television ad, 2011
                                                                                                            • Figure 31: Northern Trust television ad, 2011
                                                                                                        • The Mass Affluent Consumer and Decision-Making

                                                                                                          • Key points
                                                                                                            • How mass affluents make investment decisions
                                                                                                              • Figure 32: Level of involvement in financial decision making by gender, August 2011
                                                                                                              • Figure 33: Level of involvement in financial decision making, by age, August 2011
                                                                                                              • Figure 34: Level of involvement in financial decision making, by household income, August 2011
                                                                                                            • Mass affluents trust themselves more than they trust financial professionals
                                                                                                                • Figure 35: Most trusted provider of financial advice, by age, August 2011
                                                                                                                • Figure 36: Most trusted provider of financial advice, by household income, August 2011
                                                                                                              • Branches are important in acquiring mass affluent customers
                                                                                                                  • Figure 37: Sources of information for making financial decisions by gender, August 2011
                                                                                                                  • Figure 38: Sources of information for making financial decisions by age, August 2011
                                                                                                                  • Figure 39: Sources of information for making financial decisions, by household income, August 2011
                                                                                                                • Bank communications are useful to mass affluents
                                                                                                                  • Figure 40: Attitudes about communications received from primary bank, by age, August 2011
                                                                                                                • Information from the media is more influential than from individuals
                                                                                                                  • Figure 41: Sources of information for financial topics, by gender, August 2011
                                                                                                                  • Figure 42: Sources of information for financial topics by age, August 2011
                                                                                                                  • Figure 43: Sources of information for financial topics by household income, August 2011
                                                                                                              • The Mass Affluent Consumer and the Economy

                                                                                                                • Key points
                                                                                                                  • Mass affluents are cutting back
                                                                                                                      • Figure 44: Attitudes about recent financial situation in the household, August 2011
                                                                                                                      • Figure 45: Attitudes about recent financial situation in household by gender, August 2011
                                                                                                                      • Figure 46: Attitudes about recent financial situation in household, by age, August 2011
                                                                                                                      • Figure 47: Attitudes about recent financial situation in household, by household income, August 2011
                                                                                                                    • Mass affluents have lost trust in banks
                                                                                                                        • Figure 48: Attitudes about financial institutions and advisors, by age, August 2011
                                                                                                                    • The Mass Affluent Consumer and New Media

                                                                                                                      • Key points
                                                                                                                        • Social networking sites effective to reach some mass affluents
                                                                                                                          • Figure 49: Attitudes about financial services and social media, by age, August 2011
                                                                                                                          • Figure 50: Attitudes about financial services and social media, by household size, August 2011
                                                                                                                        • Mobile banking not crucial to older mass affluents
                                                                                                                          • Figure 51: Attitudes about mobile and online banking/investing, by gender, August 2011
                                                                                                                          • Figure 52: Attitudes about mobile and online banking/investing, by age, August 2011
                                                                                                                          • Figure 53: Attitudes about mobile and online banking/investing, by household size, August 2011
                                                                                                                      • Custom Consumer Groups

                                                                                                                          • Figure 54: Attitudes about recent financial situation in household by gender and marital/relationship status, August 2011
                                                                                                                          • Figure 55: Attitudes about recent financial situation in household by employment, August 2011
                                                                                                                          • Figure 56: Sources of information for making financial decisions by urban area, August 2011
                                                                                                                      • Appendix—Simmons Cohort Analysis

                                                                                                                        • Bank of America most popular bank
                                                                                                                          • Figure 57: Most popular banks, by household income, February 2010-March 2011
                                                                                                                        • Online banking usage increasing
                                                                                                                          • Figure 58: Number of times visited an online banking or trading site in past seven days, January 2007-November 2007
                                                                                                                          • Figure 59: Number of times visited an online banking or trading site in past seven days, February 2010-March 2011
                                                                                                                          • Figure 60: Number of times visited an online banking or trading site in past 30 days, January 2007-November 2007
                                                                                                                          • Figure 61: Number of times visited an online banking or trading site in past 30 days, February 2010-March 2011
                                                                                                                          • Figure 62: Number of times visited an online banking or trading site in past seven days, by age, January 2007-November 2007
                                                                                                                          • Figure 63: Number of times visited an online banking or trading site in past seven days, by age, February 2010-March 2011
                                                                                                                          • Figure 64: Number of times visited an online banking or trading site in past 30 days, by age, January 2007-November 2007
                                                                                                                          • Figure 65: Number of times visited an online banking or trading site in past 30 days, by age, February 2010-March 2011
                                                                                                                      • Appendix—Trade Associations

                                                                                                                        Companies Covered

                                                                                                                        • Ameriprise Financial Inc.
                                                                                                                        • Bank of America Corporation
                                                                                                                        • Merrill Lynch & Co. Inc

                                                                                                                        Marketing to the Mass Affluent - US - November 2011

                                                                                                                        £3,199.84 (Excl.Tax)