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Mass Affluent and Retirement Planning - US - October 2009

This report expands on the themes contained in Mintel’s April 2008 report, Who are the Mass Affluent? – US, April 2008, focusing specifically on the retirement planning activities of this group. The retirement investment behavior and attitudes of this group are analyzed as well as the impact of the ongoing economic recession.

Some major themes in this report include:

  • Banks are in an excellent position to gain mass affluent retirement planning market share
  • Weakness in the real estate market as well as the securities markets has reduced retirement account balances and affected plans for retirement. This may bring opportunity to financial institutions and advisors as mass affluent consumers look for help in getting their savings back on track.
  • Baby Boomers are a large part of the mass affluent group. Appealing to them, their sensitivities and their needs will be key to success with the mass affluent segment.

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Table of contents

  1. Scope and Themes

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

                        • Industry overview
                          • Who are the Mass Affluent?
                            • Future growth of the Mass Affluent segment is limited
                            • Insights and Opportunities

                              • Key points
                                • Mass Affluent consumers want to feel special
                                  • Saving for retirement is Mass Affluents’ major financial goal
                                    • Figure 1: Major financial goals of the Mass Affluent, by gender and age, February 2008
                                    • Figure 2: Major financial goals of the Mass Affluent, by income, February 2008
                                  • Opportunities for banks
                                    • Declining retirement savings may lead to increased need for advice
                                        • Figure 3: Average balances of those participating in any DC plan or IRA/Keogh, by income*, 2004-09
                                        • Figure 4: Average balances of those participating in any DC plan or IRA/Keogh, by age of household head*, 2004-09
                                        • Figure 5: Average balances of those participating in any DC plan or IRA/Keogh, by net worth percentile*, 2004-09
                                      • Asset consolidation may provide opportunity
                                        • Image advertising may be the most effective right now
                                        • Inspire Insights

                                            • Trend: Rebuilding Trust
                                              • Implications
                                                • Trend: Customer-centric
                                                  • Implications
                                                  • Market Size and Forecast

                                                    • Key points
                                                      • The make-up of the Mass Affluent has changed
                                                        • Figure 6: Income groups making up Mass Affluent, 1992-2012
                                                        • Figure 7: Forecast of U.S. households with net worth between $100K and $1 million, 2004-09, March 2005
                                                        • Figure 8: Current forecast of U.S. households with net worth between $100K and $1 million, 2004-09, October 2009
                                                      • Plan participation of Mass Affluents
                                                          • Figure 9: Of those participating in a plan, percentage of all families with employment-based retirement plan, by family income, 2004 and 2007
                                                          • Figure 10: Of those participating in a plan, percentage of all families with employment-based retirement plan, by age of HH head, 2004 and 2007
                                                          • Figure 11: Of those participating in a plan, percentage of all families with employment-based retirement plan, by net worth percentile, 2004 and 2007
                                                        • Geographic distribution of Mass Affluents is expanding
                                                          • Figure 12: Top markets for households with $100K+ in income producing assets, 2007
                                                      • Competitive Context

                                                        • Key points
                                                          • Top 10 retirement services providers
                                                            • Figure 13: Top 10 primary retirement services providers, 2007
                                                          • Banks and Mass Affluents
                                                            • Investment companies and Mass Affluents
                                                              • Figure 14: Percentage of Mass Affluents who have accounts at the three most popular firms, spring 2007
                                                            • Bank of America survey
                                                            • Market Drivers

                                                              • Key points
                                                                • The number of Mass Affluent households is increasing…
                                                                  • Figure 15: Forecast of U.S. households with net worth between $100K and $1 million, 2004-09, April 2008
                                                                • …but as a percentage of the total population, they are decreasing
                                                                  • Figure 16: Income distribution of households, March 2009
                                                                • Minority groups—and primarily Hispanics—offer potential growth
                                                                  • Economic indicators still showing weakness
                                                                    • Figure 17: Percent change in economic indicators in current dollars, December 2008-July 2009
                                                                    • Figure 18: Unemployment rate, by month, 2009
                                                                  • The weak economy has affected Mass Affluents the most
                                                                    • Figure 19: How consumers feel their financial situation has changed, by HH income, July 2007-July 2008
                                                                  • Plans for retirement are changing
                                                                    • Women Mass Affluent customers
                                                                      • Figure 20: Top three financial situations that are important to affluents, by gender, January 2006
                                                                    • The real estate market
                                                                      • Figure 21: S&P/Case-Shiller home price indices, 1998-2008
                                                                    • The Obama administration is trying to help
                                                                    • Leading Companies

                                                                      • Key points
                                                                        • Succeeding in this market
                                                                          • Wells Fargo
                                                                            • Bank of America
                                                                              • Citizens Bank
                                                                                • Fidelity
                                                                                  • MetLife
                                                                                    • HSBC
                                                                                    • Innovation and Innovators

                                                                                      • Key points
                                                                                        • Fidelity Retirement Rewards Card
                                                                                          • Hybrid products
                                                                                            • Targeting women
                                                                                            • Advertising and Promotion

                                                                                              • Key points
                                                                                                • Emails becoming more prevalent
                                                                                                  • Consumers becoming more receptive to emails
                                                                                                    • Figure 22: Percent increase in desired email frequency, September 2007-October 2008
                                                                                                  • How consumers use email
                                                                                                    • Figure 23: Check email at least four times a day, by gender, March 2009
                                                                                                    • Figure 24: Check email at least four times a day, by age, March 2009
                                                                                                    • Figure 25: Check email at least four times a day, by income, March 2009
                                                                                                    • Figure 26: More likely to open an email if they know the sender, by age, March 2009
                                                                                                    • Figure 27: More likely to open an email if they know the sender, by income, March 2009
                                                                                                  • Mass Affluent most comfortable with financial services emails
                                                                                                    • Figure 28: Comfortable with emails from financial services companies, by income, March 2009
                                                                                                    • Figure 29: Comfortable with emails from financial services companies, by age, March 2009
                                                                                                  • Email security is a big issue
                                                                                                    • Authentication makes a difference…but not a big one
                                                                                                      • Email and financial services companies
                                                                                                        • Figure 30: “Not very” or “not at all” comfortable with using email with financial services companies, by age, March 2009
                                                                                                      • Advertising overview
                                                                                                        • Print
                                                                                                          • Figure 31: Charles Schwab print ad, 2009
                                                                                                        • Email
                                                                                                          • Figure 32: ING email advertisement, 2009
                                                                                                          • Figure 33: Wells Fargo email advertisement, 2009
                                                                                                        • Direct mail
                                                                                                          • Figure 34: UBS direct mail advertisement, 2009
                                                                                                          • Figure 35: Fidelity direct mail ad, 2009
                                                                                                          • Figure 36: Table of contents for “Retirement Investment Guide” ICMA direct mail ad, 2009
                                                                                                        • Broadcast ads
                                                                                                          • Figure 37: Charles Schwab TV advertisement, animated lady says retirement went boom, up in smoke, February 2009
                                                                                                          • Figure 38: Fidelity TV advertisement, couple wants to know what guidance they can get, March 2009
                                                                                                          • Figure 39: Prudential TV advertisement, different rocks/web, August 2008
                                                                                                          • Figure 40: John Hancock TV advertisement, woman types on a laptop, messages on the left, March 2009
                                                                                                          • Figure 41: TD Ameritrade TV advertisement, the Independent Spirit, August 2008
                                                                                                          • Figure 42: UBS TV advertisement, You & US. UBS, May 2009
                                                                                                      • The Consumer

                                                                                                        • Key points
                                                                                                          • Most Mass Affluent people have some kind of retirement plan
                                                                                                            • Figure 43: Retirement plan ownership, by gender, July 2009
                                                                                                            • Figure 44: Retirement plan ownership, by age, July 2009
                                                                                                            • Figure 45: Retirement plan ownership, by income, July 2009
                                                                                                          • And so do their spouses
                                                                                                              • Figure 46: Ownership of spousal retirement savings acccount, by gender, July 2009
                                                                                                              • Figure 47: Ownership of spousal retirement savings acccount, by age, July 2009
                                                                                                              • Figure 48: Ownership of spousal retirement savings acccount, by income, July 2009
                                                                                                            • Retirement plan balances
                                                                                                              • Figure 49: Retirement plan balances, by gender, July 2009
                                                                                                              • Figure 50: Retirement plan balances, by age, July 2009
                                                                                                              • Figure 51: Retirement plan balances, by income, July 2009
                                                                                                              • Figure 52: 401(k) account balances, by gender, 2009
                                                                                                              • Figure 53: Keogh/SEP/IRA/pension account balances, by gender, 2009
                                                                                                              • Figure 54: 401(k) account balances, by region, 2009
                                                                                                              • Figure 55: Keogh/SEP/IRA/pension account balances, by region, 2009
                                                                                                              • Figure 56: IRA balances, by region, 2009
                                                                                                            • Retirement plan balances make up bulk of Mass Affluent assets
                                                                                                              • Figure 57: Percentage of assets made up of retirement accounts, by gender, July 2009
                                                                                                              • Figure 58: Percentage of assets made up of retirement accounts, by age, July 2009
                                                                                                            • Economy has changed women’s behavior more than men’s
                                                                                                                • Figure 59: How recent economic events have changed behavior, by gender, July 2009
                                                                                                                • Figure 60: How recent economic events have changed behavior, by gender and presence of children in HH, July 2009
                                                                                                                • Figure 61: Change in confidence due to economy, by gender, July 2009
                                                                                                              • Other groups are changing their behavior, too
                                                                                                                  • Figure 62: How recent economic events have changed behavior, by age, July 2009
                                                                                                                  • Figure 63: How recent economic events have changed behavior, by income, July 2009
                                                                                                                • Women are more likely to want financial advice…
                                                                                                                  • Figure 64: Attitudes towards financial services, by gender, 2009
                                                                                                                • …and are more likely to have changed the way they use advisors
                                                                                                                  • Figure 65: Attitudes towards using advisors, by gender, July 2009
                                                                                                                  • Figure 66: Attitudes towards using advisors, by age, July 2009
                                                                                                                  • Figure 67: Attitudes towards using advisors, by income, July 2009
                                                                                                                  • Figure 68: Attitudes towards using advisors, by presence of children, July 2009
                                                                                                              • Cluster Analysis

                                                                                                                  • Changers
                                                                                                                    • The Guided
                                                                                                                      • Independents
                                                                                                                        • Cluster characteristics
                                                                                                                          • Figure 69: Mass Affluent retirement planning clusters, July 2009
                                                                                                                          • Figure 70: Type of retirement account (s), by Mass Affluent retirement planning clusters, July 2009
                                                                                                                          • Figure 71: How recent economic events have changed behavior, by Mass Affluent retirement planning clusters, July 2009
                                                                                                                          • Figure 72: Attitudes about the economy and retirement savings, by Mass Affluent retirement planning clusters, July 2009
                                                                                                                          • Figure 73: Attitudes about advisors, by Mass Affluent retirement planning clusters, July 2009
                                                                                                                        • Cluster demographics
                                                                                                                          • Figure 74: Mass Affluent retirement planning clusters, by gender, July 2009
                                                                                                                          • Figure 75: Mass Affluent retirement planning clusters, by age, July 2009
                                                                                                                          • Figure 76: Mass Affluent retirement planning clusters, by income, July 2009
                                                                                                                        • Cluster methodology
                                                                                                                        • Appendix: Other Useful Consumer Tables

                                                                                                                            • Figure 77: Retirement savings behavior, by number of people in household, July 2009
                                                                                                                            • Figure 78: Retirement savings behavior, by region, July 2009
                                                                                                                            • Figure 79: Retirement savings behavior, by gender and age 18-34, July 2009
                                                                                                                            • Figure 80: Retirement savings behavior, by gender and age, 34-54, July 2009
                                                                                                                            • Figure 81: Retirement savings behavior, by gender and age, 55+, July 2009
                                                                                                                        • Appendix: Trade Associations

                                                                                                                          Companies Covered

                                                                                                                          • American Bakers Association (ABA)
                                                                                                                          • Bank Administration Institute
                                                                                                                          • Bank of America Corporation
                                                                                                                          • Bureau of Economic Analysis
                                                                                                                          • Charles Schwab Corporation
                                                                                                                          • Citigroup Inc.
                                                                                                                          • Employee Benefit Research Institute
                                                                                                                          • Financial Planning Association
                                                                                                                          • Greenfield Online
                                                                                                                          • HSBC USA Inc.
                                                                                                                          • ICMA Retirement Corporation
                                                                                                                          • Merrill Lynch (UK)
                                                                                                                          • MetLife, Inc.
                                                                                                                          • Morgan Stanley
                                                                                                                          • TD Ameritrade Holding Corporation
                                                                                                                          • The American Bankers Association
                                                                                                                          • The Boston Consulting Group Inc.
                                                                                                                          • The Financial Services Roundtable
                                                                                                                          • U.S. Bureau of Labor Statistics

                                                                                                                          Mass Affluent and Retirement Planning - US - October 2009

                                                                                                                          US $3,995.00 (Excl.Tax)