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Mass Affluent and Financial Services - US - December 2012

“After being challenged by the recession, the mass affluent market is staging somewhat of a comeback and has become an increasingly attractive market for banks and other types of financial institutions. The question is whether these institutions can find the hooks most relevant to this group and grow their business in this newly—and now highly—sought-after segment.”

– Robyn Kaiserman, Financial Services Industry Analyst

Some questions answered in this report include:

  • How has the recession affected the mass affluent?
  • Where is the biggest opportunity to expand into the mass affluent market?
  • What do mass affluents want in their financial institution?
  • How can the industry reach the mass affluent?

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Table of contents

  1. Scope and Themes

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

                        • The market
                          • The consumer
                            • Banks have an opportunity—and a challenge
                              • Figure 1: Satisfaction with primary bank and bank advice, by income, August 2012
                              • Figure 2: Satisfaction with primary bank and bank advice, by net worth (less equity in primary residence), August 2012
                            • Opportunities in mobile banking
                              • Figure 3: Tablet and smartphone ownership, mass affluents by household income, August 2012
                              • Figure 4: Household use of banking and financial services technology, mass affluents, August 2012
                            • Mass affluent attitudes about their household financial situation
                              • Figure 5: Mass affluent attitudes toward household finances, August 2012
                            • Mass affluents embracing the “New Frugality”
                              • Figure 6: Mass affluent attitudes toward household financial situation, August 2012
                            • Educational debt is holding back some younger mass affluents
                              • Figure 7: Attitudes toward educational expenses, by age, August 2012
                            • Retirement savings
                              • Figure 8: Total amount in mass affluent household retirement savings, by age, August 2012
                            • Attitudes about banks and insurance agents
                              • Figure 9: Attitudes toward banks and insurance agents, August 2012
                            • Mass affluent are extremely fee sensitive
                              • Figure 10: Top three factors that influence mass affluents’ choice of financial institutions, August 2012
                            • Primary influences in opening an account
                              • Figure 11: Factors influencing choice of financial institution, any agree, by gender and age, August 2012
                            • Online brokers are competing for mass affluents
                              • Figure 12: All respondents that have at least $5,000 in self-directed account, by income, May 2012
                            • Advice may help with asset allocation needs
                              • Figure 13: Repertoire analysis of primary type of investments in all household savings/investment account(s), by household net worth (less equity in primary residence), August 2012
                            • What we think
                            • Issues in the Market

                                • How has the recession affected the mass affluent?
                                  • Where is the biggest opportunity to expand into the mass affluent market?
                                    • What do mass affluents want in their financial institution?
                                      • How can the industry reach the mass affluent?
                                      • Insights and Opportunities

                                        • Key points
                                          • Banks have a huge opportunity
                                            • Figure 14: Preference for advice from a bank adviser, by income, August 2012
                                            • Figure 15: Satisfaction with primary bank and bank advice, by household income, August 2012
                                          • Mobile activities
                                            • Figure 16: Tablet and smartphone ownership, by household income, August 2012
                                            • Figure 17: Ownership of smartphones and tablets, by income, household net worth (less equity in primary residence) and household retirement savings, August 2012
                                            • Figure 18: Household use of technology for financial activities, by age, August 2012
                                          • Retirement is a worry
                                            • Figure 19: Financial concerns of mass affluents, November 2011-October 2012
                                            • Figure 20: Total amount in household retirement savings, by age, August 2012
                                          • Mass affluents want low fees and convenience
                                            • Figure 21: Top three most important factors in choice of financial institution, by household income, August 2012
                                            • Figure 22: Factors influencing choice of financial institution, any agree, by gender and age, August 2012
                                          • College savings plans
                                            • Figure 23: Attitudes toward educational expenses, any agree, by household income, August 2012
                                        • Trend Applications

                                            • Trend: Make it Mine
                                              • Industry application
                                                • Trend: A Simple Balance for Health
                                                  • Industry application
                                                    • 2015 Trend—Access Anything, Anywhere
                                                      • Industry implications
                                                      • Market Size

                                                        • Key points
                                                          • Who are the mass affluent?
                                                            • How many mass affluents are there?
                                                              • Household income trends
                                                                • Figure 24: Distribution of households, by household income, 2001-11
                                                                • Figure 25: Family net worth, selected years, 2001-10
                                                                • Figure 26: Household net worth (less equity in primary residence), by age, August 2012
                                                                • Figure 27: Household net worth (less equity in primary residence), by gender, August 2012
                                                                • Figure 28: Household net worth (less equity in primary residence), by household income, August 2012
                                                              • Where are the mass affluent?
                                                                • Figure 29: Top 10 U.S. mass affluent markets, October 2012
                                                            • Competitive Context

                                                              • Key points
                                                                • Banks are focusing on mass affluent
                                                                    • Figure 30: Level or trust in sources of financial advice, August 2011
                                                                    • Figure 31: Mass affluent attitudes toward banks and advice, by household income, any agree, August 2012
                                                                    • Figure 32: Mass affluent attitudes toward banks and advice, by net worth (less equity in primary residence), August 2012
                                                                    • Figure 33: Mass affluent attitudes towards banks and advice, by total amount in household retirement savings, August 2012
                                                                  • Banks, investment services, and trust
                                                                      • Figure 34: Attitudes toward banks and household finances, by household retirement savings, household net worth (less equity in primary residence) and income, August 2012
                                                                    • Online brokers aiming for mass affluent
                                                                        • Figure 35: Percentage with at least $5,000 in self-directed account, all respondents by income, May 2012
                                                                        • Figure 36: Confidence in making financial decisions, by household retirements savings, August 2012
                                                                        • Figure 37: Usage of online investment tools, by household net worth (less equity in primary residence), August 2012
                                                                      • Retirement stores are coming to malls
                                                                      • Market Drivers

                                                                        • Key points
                                                                          • The economy
                                                                            • Figure 38: U.S. unemployment rate, November 2011-October 2012
                                                                            • Figure 39: S&P/Case-Shiller Home Price Index, seasonally adjusted, Q1 2006-Q1 2012
                                                                            • Figure 40: S&P 500 index, Nov. 7, 2011-Oct. 7, 2012
                                                                            • Figure 41: Dow Jones Industrial Average index, November 2011-October 2012
                                                                          • Optimism is in the air
                                                                            • Figure 42: Mass affluents’ outlook on the economy for the next three months, June 2010-February 2012
                                                                            • Figure 43: Financial concerns of mass affluents, November 2011-October 2012
                                                                            • Figure 44: General purchase intentions of mass affluents, November 2011, August 2012
                                                                        • Marketing Channels

                                                                          • Key points
                                                                            • Bank branches are important
                                                                              • Figure 45: Importance of branch location in choosing a financial institution, by income, August 2012
                                                                            • Social media
                                                                              • Figure 46: Monthly social media usage, all respondents by income, August 2012
                                                                              • Figure 47: Mass affluent attitudes toward social media and financial institutions, by gender, August 2012
                                                                              • Figure 48: Top 10 most popular banks on Facebook, September 2011
                                                                              • Figure 49: Preferred types of information on social platforms, May 2012
                                                                            • Print is still important
                                                                            • Leading Companies

                                                                              • Key points
                                                                                • Bank of America Merrill Lynch
                                                                                  • JPMorgan Chase
                                                                                  • Innovations and Innovators

                                                                                    • Key points
                                                                                      • SunTrust
                                                                                        • Merrill Edge
                                                                                          • Acru Bank
                                                                                            • Figure 50: Acru bank branch, 2012
                                                                                        • Marketing Strategies

                                                                                          • Key points
                                                                                            • Rewards programs, not incentives
                                                                                              • Figure 51: Factors influencing choice of particular financial institution, by gender and age, August 2012
                                                                                            • Appealing to do-it-yourselfers
                                                                                              • Figure 52: TD Ameritrade direct mail advertisement, April 2012
                                                                                              • Figure 53: Fidelity online advertisement, August 2012
                                                                                            • Micro-segmentation is key
                                                                                              • Figure 54: Fidelity print advertisement, December 2011
                                                                                            • Premium rewards cards remain popular products
                                                                                              • Figure 55: Chase sapphire preferred online advertisement, June 2012, October 2012
                                                                                              • Figure 56: Citibank print advertisement, August 2012
                                                                                            • General advertising
                                                                                              • Figure 57: Chartis print advertisement, August 2012
                                                                                              • Figure 58: UBS print advertisement, January 2012
                                                                                              • Figure 59: BlackRock iShares print advertisement, October 2011
                                                                                              • Figure 60: Wells Fargo online advertisement, December 2011
                                                                                              • Figure 61: Fidelity online advertisement, January 2012
                                                                                              • Figure 62: Merrill Edge direct mail advertisement, September 2012
                                                                                              • Figure 63: Merrill Lynch direct mail advertisement, September 2012
                                                                                            • Additional television ads
                                                                                              • Figure 64: Charles Schwab television advertisement, 2012
                                                                                              • Figure 65: Citibank television advertisement, 2012
                                                                                          • The Mass Affluent Consumer—Household Net Worth

                                                                                            • Key points
                                                                                              • Household net worth (less equity in primary residence)
                                                                                                • Figure 66: Household net worth (less equity in primary residence), mass affluents by gender, August 2012
                                                                                                • Figure 67: Household net worth (less equity in primary residence), mass affluents by age, August 2012
                                                                                                • Figure 68: Household net worth (less equity in primary residence), mass affluents by household income, August 2012
                                                                                                • Figure 69: Household net worth (less equity in primary residence), mass affluents by education, August 2012
                                                                                            • Attitudes toward Banks

                                                                                              • Key points
                                                                                                • Bank satisfaction
                                                                                                  • Figure 70: Attitudes toward banks and household finances, by age, August 2012
                                                                                                  • Figure 71: Attitudes toward banks and household finances, by household income, August 2012
                                                                                                  • Figure 72: Attitudes toward banks and household finances, by region, August 2012
                                                                                                  • Figure 73: Attitudes toward banks and household finances, by amount in household retirement savings, August 2012
                                                                                              • Use of Technology

                                                                                                • Key points
                                                                                                  • Men use technology more
                                                                                                    • Figure 74: Household use of banking and financial services technology, by gender, August 2012
                                                                                                    • Figure 75: Household use of banking and financial services technology, by gender and age, August 2012
                                                                                                    • Figure 76: Household use of banking and financial services technology, by household income, August 2012
                                                                                                    • Figure 77: Household use of banking and financial services technology, by household size, August 2012
                                                                                                    • Figure 78: Household use of banking and financial services technology, by household net worth (less equity in primary residence), August 2012
                                                                                                    • Figure 79: Household use of banking and financial services technology, by total amount in household retirement savings account(s), August 2012
                                                                                                • Household Spending, Investing, and Financial Decisions

                                                                                                  • Key points
                                                                                                    • The recession has affected financial behavior
                                                                                                      • Figure 80: Attitudes toward household finances, by gender, August 2012
                                                                                                      • Figure 81: Attitudes toward household finances, by age, August 2012
                                                                                                      • Figure 82: Attitudes toward household finances, by amount in household retirement savings account(s), August 2012
                                                                                                      • Figure 83: Attitudes toward household finances, by household income, August 2012
                                                                                                      • Figure 84: Attitudes toward household finances, by region, August 2012
                                                                                                  • Choosing a Financial Institution

                                                                                                    • Key points
                                                                                                      • Low fees are most important
                                                                                                        • Figure 85: Factors influencing choice of financial institution, by household income, August 2012
                                                                                                        • Figure 86: Factors influencing choice of financial institution, by region, August 2012
                                                                                                        • Figure 87: Factors influencing choice of financial institution, by household net worth (less equity in primary residence), August 2012
                                                                                                        • Figure 88: Factors influencing choice of financial institution, by race/Hispanic origin, August 2012
                                                                                                        • Figure 89: Factors influencing choice of financial institution, by area, August 2012
                                                                                                    • Type of Retirement Account Owned

                                                                                                      • Key points
                                                                                                        • More than half have 401(k) plans
                                                                                                          • Figure 90: Type of retirement savings accounts owned by household, mass affluent by age, August 2012
                                                                                                          • Figure 91: Type of retirement savings accounts owned, overall by age, June/July 2011
                                                                                                          • Figure 92: Type of retirement savings accounts owned by household, by household income, August 2012
                                                                                                          • Figure 93: Type of retirement savings account owned by household, by household retirement savings account(s), August 2012
                                                                                                          • Figure 94: Type of retirement savings account owned by household, by race/Hispanic origin, August 2012
                                                                                                          • Figure 95: Type of retirement savings account owned by household, by household net worth (less equity in primary residence), August 2012
                                                                                                      • Investments in Savings/Investment Accounts

                                                                                                        • Key points
                                                                                                          • Mutual funds, cash, and money market funds are primary investments
                                                                                                            • Figure 96: Primary type of investments in all household savings/investment account(s), by gender and age August 2012
                                                                                                            • Figure 97: Primary type of investments in all household savings/investment account(s), by household income, August 2012
                                                                                                            • Figure 98: Primary type of investments in all household savings/investment account(s), by education, August 2012
                                                                                                            • Figure 99: Primary type of investments in all household savings/investment account(s), by amount in household retirement savings account(s), August 2012
                                                                                                        • Total Amount in Retirement Savings

                                                                                                          • Key points
                                                                                                            • Almost half of respondents have more than $200K
                                                                                                              • Figure 100: Total amount in household retirement savings account(s), by gender, August 2012
                                                                                                              • Figure 101: Total amount in household retirement savings account(s), by age, August 2012
                                                                                                              • Figure 102: Total amount in household retirement savings account(s), by marital status, August 2012
                                                                                                              • Figure 103: Total amount in household retirement savings account(s), by household size, August 2012
                                                                                                          • Repertoire Analysis

                                                                                                            • Key points
                                                                                                              • Younger mass affluents have fewer types of investments
                                                                                                                • Figure 104: Repertoire of primary type of investments in all household savings/investment account(s), by gender and age, August 2012
                                                                                                                • Figure 105: Repertoire of primary type of investments in all household savings/investment account(s), by household net worth (less equity in primary residence), August 2012
                                                                                                                • Figure 106: Attitudes towards banks and household finances, by repertoire of primary type of investments in all household savings/investment account(s), August 2012
                                                                                                                • Figure 107: Household financial behavior, by repertoire of primary type of investments in all household savings/investment account(s), August 2012
                                                                                                            • Cluster Analysis

                                                                                                                • Satisfied Savers
                                                                                                                  • Demographics
                                                                                                                    • Characteristics
                                                                                                                      • Opportunity
                                                                                                                        • Financially Unprepareds
                                                                                                                          • Demographics
                                                                                                                            • Characteristics
                                                                                                                              • Opportunity
                                                                                                                                • Technologically Disconnecteds
                                                                                                                                  • Demographics
                                                                                                                                    • Characteristics
                                                                                                                                      • Opportunity
                                                                                                                                        • Complacent Loyalists
                                                                                                                                          • Demographics
                                                                                                                                            • Characteristics
                                                                                                                                              • Opportunity
                                                                                                                                                • Cluster Characteristic Tables
                                                                                                                                                  • Figure 108: Target clusters, August 2012
                                                                                                                                                  • Figure 109: Household net worth (less equity in primary residence), by target clusters, August 2012
                                                                                                                                                  • Figure 110: Attitudes towards banks and household finances, by target clusters, August 2012
                                                                                                                                                  • Figure 111: Mass affluent attitudes towards finances, banks and advisers, by target clusters, August 2012
                                                                                                                                                  • Figure 112: Household use of technology and banking, by target clusters, August 2012
                                                                                                                                                  • Figure 113: Factors influencing choice of financial institution, by target clusters, August 2012
                                                                                                                                                  • Figure 114: Type of retirement savings account owned by household, by target clusters, August 2012
                                                                                                                                                  • Figure 115: Total amount in household retirement savings account(s), by target clusters, August 2012
                                                                                                                                                  • Figure 116: Primary type of investments in all household savings/investment account(s), by target clusters, August 2012
                                                                                                                                                  • Figure 117: Repertoire of primary type of investments in all household savings/investment account(s), by target clusters, August 2012
                                                                                                                                                • Cluster demographic tables
                                                                                                                                                  • Figure 118: Target cluster, by demographic, August 2012
                                                                                                                                                • Cluster methodology
                                                                                                                                                • Appendix—Trade Associations

                                                                                                                                                  Companies Covered

                                                                                                                                                  • Bank of America Corporation
                                                                                                                                                  • Charles Schwab Corporation
                                                                                                                                                  • Chase Home Finance
                                                                                                                                                  • JPMorgan Chase & Co
                                                                                                                                                  • Merrill Lynch & Co. Inc

                                                                                                                                                  Mass Affluent and Financial Services - US - December 2012

                                                                                                                                                  £3,199.84 (Excl.Tax)