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Lifestage Marketing in Financial Services - US - July 2018

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

- Chris Shadle - Financial Services Analyst

This report examines the following issues:

  • Debt is the most pressing financial concern consumers face
  • Lack of financial confidence is a serious issue, especially among women
  • Consumers are not terribly responsive to brands’ marketing channels

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • Overview
          • The issues
            • Debt is the most pressing financial concern consumers face
              • Figure 1: Attitudes toward personal finance, by generation, April 2018
            • Lack of financial confidence is a serious issue, especially among women
              • Figure 2: Financial preferences, by age and gender, April 2018
            • Consumers are not terribly responsive to brands’ marketing channels
              • Figure 3: Response to financial advertising, April 2018
            • The opportunities
              • Young affluent consumers are mobile-ready
                • Figure 4: Financial attitudes, banking on mobile devices, by age and income, April 2018
              • Most consumers worry about having enough money to retire
                • Figure 5: Financial attitudes, concerns about retirement, by age, April 2018
              • Social causes are an important loyalty driver
                • Figure 6: Financial attitudes, importance of supporting causes, by age, April 2018
              • What it means
              • The Market – What You Need to Know

                • An aging America
                  • Consumers are waiting longer to marry and have children
                    • Americans hold a staggering amount of debt
                      • Home ownership rate on the rise for the first time in 13 years
                      • Market Breakdown

                        • An aging America
                          • Figure 7: US population, by age, 2015, 2020, 2025
                          • Figure 8: Number of births (in millions) by year
                      • Market Factors

                        • Consumer debt is at an all-time high, potentially delaying traditional lifestage progression
                          • Figure 9: Household debt and credit developments, Q1 2018
                          • Figure 10: Outstanding consumer credit, revolving and nonrevolving, 1985-2018
                        • Debt is both pervasive and stressful
                          • Figure 11: Debt as a source of stress, by age, August 2017
                        • Men and women are both marrying later
                          • Figure 12: Median age at first marriage, by gender, 2006-16
                        • Consumers are delaying having children
                          • Figure 13: Birthrates by age of mother, 1940-2015
                        • Fertility and birthrates are in steady decline
                          • Figure 14: Annual births and general fertility rate, 2006-16
                        • Millennials spur uptick in homeownership, but rates are still low
                          • Figure 15: Home ownership rate for the US (not seasonally adjusted), January 2007-October 2017
                          • Figure 16: Home ownership rate, by age, 2007 versus 2017
                        • Unemployment continues to drop, as gig economy changes perception of work and retirement
                          • Figure 17: Unemployment and underemployment, January 2007-January 2018
                      • Key Players – What You Need to Know

                        • Consumers are taking more control over their own finances
                          • Many consumers do not prioritize saving for the future
                            • Hyper-personalized digital products make consumers’ lives easier
                            • What’s Working?

                              • DIY Financial Wellness
                                • Mint
                                  • Passive investment revolution places consumers in control
                                    • Robinhood brings free stock-picking and cryptocurrency trading to the masses
                                      • Figure 18: Robinhood email campaign, May 2018
                                    • Financial brands offer added value in innovative ways
                                      • Figure 19: Chase email campaign, May 2018
                                      • Figure 20: Sofi direct mail campaign, May 2018
                                    • Personal loans surge in popularity to combat mounting debt load
                                      • Figure 21: Personal lending direct mail volume, Q2 2016-Q1 2018
                                      • Figure 22: LendingClub direct mail campaign, June 2017
                                      • Figure 23: Marcus by Goldman Sachs direct mail campaign, February 2018
                                  • What’s Struggling?

                                    • Many consumers do not prioritize saving for the future
                                      • Figure 24: Financial goals, by age, April 2018
                                    • Consumers continue to rely on friends/family for financial knowledge
                                      • Figure 25: Sources of financial information, April 2018
                                    • Consumers are not following industry’s marketing channels
                                      • Figure 26: Response to financial advertising, April 2018
                                  • What’s Next?

                                    • Student loan repayment as a job perk
                                      • Figure 27: Fidelity email campaign, August 2017
                                    • Hyper-personalized digital products make consumers’ lives easier
                                      • Figure 28: PNC email campaign, March 2018
                                    • Marketers set their sights on the iGeneration
                                      • Figure 29: Plans for the future, tween/teen iGens, March 2017
                                  • The Consumer – What You Need to Know

                                    • Debt is the most pressing issue overall
                                      • Most consumers, particularly women, lack financial confidence
                                        • Consumers are worried about retirement but not seeking help from advisors
                                          • Parents are more interested and responsive to financial marketing
                                            • Young affluent consumers think and behave differently
                                              • Social causes are an important factor for all consumers
                                              • Key Financial Goals

                                                  • Debt reduction and elimination are the top priorities
                                                    • Figure 30: Attitudes toward personal finance, by generation, April 2018
                                                    • Figure 31: Credit card behavior, by generation, May 2018
                                                  • Short-term financial goals
                                                    • Figure 32: Short-term financial goals, April 2018
                                                  • Student loan debt: a Millennial issue
                                                    • Figure 33: Millennial financial goals regarding student loan debt, April 2018
                                                  • Consumers’ short-term goals center on escaping debt
                                                    • Figure 34: Short-term financial goals, by generation, April 2018
                                                    • Figure 35: Change in financial situation over the next year, by generation, February 2018
                                                  • Medium-term financial goals focus on paying off student loans and saving for the future
                                                    • Figure 36: Medium-term financial goals, April 2018
                                                  • Medium-term goals are centered on saving for the future
                                                    • Figure 37: Medium-term financial goals, by generation, April 2018
                                                  • Long-term financial goals
                                                    • Figure 38: Long-term financial goals, April 2018
                                                  • Saving for retirement, children’s education, and buying a home are consumers’ key long-term goals
                                                    • Figure 39: Long-term financial goals, by generation, April 2018
                                                  • Home-buyers place more emphasis on short-term goals
                                                    • Figure 40: Short-term financial goals, Short-term home-buyers vs all consumers, April 2018
                                                  • Parents have their sights set on home ownership
                                                    • Figure 41: Home buying as a financial goal, by Millennial and parental status, April 2018
                                                • Sources of Financial Information

                                                  • Consumers continue to rely on friends and family for financial knowledge
                                                    • Figure 42: Sources of financial information, April 2018
                                                  • Advice from friends/family is inversely correlated with professional guidance
                                                    • Figure 43: Sources of financial information, by age, April 2018
                                                  • Income is a meaningful predictor of financial advisor utilization
                                                    • Figure 44: Sources of financial information, by age and income, April 2018
                                                  • Young men are the most interested in podcasts
                                                    • Figure 45: Sources of financial information, by age and gender, April 2018
                                                  • Those planning to purchase a home relied more on TV and the internet
                                                    • Figure 46: Sources of financial information, short-term home-buyers vs all consumers, April 2018
                                                  • Dads are the most receptive to direct mail
                                                    • Figure 47: Sources of financial information, by parental status and gender, April 2018
                                                    • Figure 48: KeyBank direct mail campaign, February 2018
                                                    • Figure 49: American Family direct mail campaign, August 2017
                                                • Response to Financial Advertising

                                                  • Consumers are not heavily utilizing industry’s marketing channels
                                                    • Figure 50: Response to financial advertising, April 2018
                                                  • Home-buyers engage in more financial activities
                                                    • Figure 51: Response to financial advertising, short-term home-buyers vs all consumers, April 2018
                                                  • Parents are marketers’ most responsive targets
                                                    • Figure 52: Response to financial advertising, by parental status, April 2018
                                                    • Figure 53: Response to financial advertising, by parental status, April 2018
                                                • Financial Preferences

                                                  • Social causes are an important loyalty driver
                                                    • Figure 54: Financial attitudes, importance of supporting causes, by age, April 2018
                                                  • Young affluent consumers are mobile-ready
                                                    • Figure 55: Financial attitudes, banking on mobile devices, by age and income, April 2018
                                                  • Age and income are both determinants of digital adoption
                                                    • Figure 56: Financial preferences, by age and income, April 2018
                                                  • Home-buyers prefer to have all financial accounts at a single institution
                                                    • Figure 57: Financial preferences, by age and home-buying as a short-term goal, April 2018
                                                • Financial Planning

                                                  • Lack of financial confidence is a serious issue, especially among women
                                                    • Figure 58: Financial preferences, by age and gender, April 2018
                                                  • Most consumers trust brands to help them reach their goals
                                                    • Figure 59: Financial attitudes, trust in financial companies to help reach goals, by age and income, April 2018
                                                  • Most consumers worry about having enough money to retire
                                                    • Figure 60: Financial attitudes, concerns about retirement, by age, April 2018
                                                    • Figure 61: Ameriprise Financial direct mail campaign, February 2018
                                                  • Only a quarter of consumers plan to seek professional retirement advice
                                                    • Figure 62: Financial behaviors, use of a financial advisor for retirement, by age and income, April 2018
                                                  • Young affluent consumers feel investing is key to financial security
                                                    • Figure 63: Financial attitudes, concerns about retirement, by age and income, April 2018
                                                • Financial Habits and Attitudes

                                                  • Financial security is a concern for all ages
                                                    • Figure 64: Financial attitudes, importance of financial security, by age, April 2018
                                                  • Younger consumers look beyond traditional financial models
                                                    • Figure 65: Financial habits and behaviors, by generation, April 2018
                                                  • Consumers behave more responsibly at different lifestages
                                                    • Figure 66: Financial habits and behaviors, by major life changes in next year, March 2018
                                                  • Soon-to-be married consumers have less financial confidence
                                                    • Figure 67: Self-assessed personal finance grade, by major life changes in next year, March 2018
                                                  • Having children has a big influence on consumers
                                                    • Family and children are the primary motivators to buy life insurance
                                                      • Figure 68: Reasons to purchase life insurance, provide for family, October 2016
                                                      • Figure 69: Gerber life direct mail campaign, December 2017
                                                    • Welcoming a new driver to the family
                                                      • Figure 70: AAA email campaign, November 2017
                                                      • Figure 71: State Farm direct mail campaign, September 2016
                                                      • Figure 72: USAA email, July 2016
                                                  • Appendix – Data Sources and Abbreviations

                                                    • Data sources
                                                      • Consumer survey data
                                                        • Direct marketing creative
                                                          • Terms

                                                          Lifestage Marketing in Financial Services - US - July 2018

                                                          US $4,395.00 (Excl.Tax)