Hearts & Wallets 2012 Prediction #2: Enhanced Segmentation Will Create New Opportunities

With so much of the financial services industry focused on serving the same target audience - Baby Boomers age 55 to 64 who are transitioning into retirement - there are tremendous opportunities to build market share and grow assets by specializing in (or at the very least paying greater attention to the needs of) other key segments.

Below are highlights from our recently published Investor Quantitative Panel - an annual survey of more than 4,500 U.S. households. We believe these insights prove why Prediction #2 should be important to your firm, and this is just a small sample of our analysis of these important segments.

From Understanding Women Investors: Breadwinners, Homemakers, Single or Partnered, Mothers and More (Insight Module 12)

• Hearts & Wallets estimate that women have total investing control or some influence over $16 T of U.S. household assets.
• Women are the sole head of 32% of U.S. households, up from 28% in 2006, and shared head in almost 50% of U.S. households.
• Women find several key tasks more difficult than men, notably retirement planning.

From Generation Y - Finances, Attitudes and Opportunities (Insight Module 14)

• “Generation Y,” also known as “Millennials,” is currently defined as people born in 1982 or later. They currently number 129 M.
• Almost half (45%) have sought help for at least one financial task.
• More than half earn $48K or less per year, but almost 1 in 10 earns $108K or more.

From the Investor Quantitative Panel: 2011

• Peak Accumulators, investors aged 21 to 64, not within 5 years of retirement, with at least $100K of investable assets, and who practice six key financial behaviors (i.e., regularly contributing to a retirement plan, spending less than they make, etc.) have an average $672K of investable assets, excluding real estate.
• Despite holding more than $400K outside of employer-sponsored plans, just 19% of Peak Accumulators consider a full-service brokerage firm as their primary provider, while about half use a self-service provider.
• More than anything else, Peak Accumulators are looking for fees that are clear and understandable and unbiased advice that puts their interests first. How many firms can say they excel in these areas? What is your firm doing to serve Peak Accumulators and Coasting Investor, their less organized counterparts, differently?

We look forward to discussing the unique attitudes, unmet needs, preferences and service concepts for reaching these - or custom segments - with you. - Laura and Chris