The mass affluent are an important target market for retail banks, with several providers offering premium products designed specifically for this group. Premium bank accounts bridge the gap between standard accounts and true private banking services. Representing a sweet spot between the mass retail market and high-net-worth (HNW) individuals, the mass affluent segment is not homogeneous, ranging from young professionals to retired individuals. Among the younger age groups, many individuals may have relatively limited assets, but will often be high earners looking to grow their wealth. Offering premium accounts not only helps to reach these more profitable individuals, but also acts as a useful gateway product through which other products and services can be channelled.

Definitions and qualification criteria vary across institutions, but mass affluent individuals are typically categorised as having at least £100,000 in investible assets and, as such, have more complex financial needs and higher expectations of service than mass-market customers. Additional features offered by premium accounts include superior service through dedicated branch counters and personal relationship banking managers, as well as added-value products such as travel benefits. There is still considerable scope to expand the premium banking market. Mintel’s consumer research reveals that only 23% of mass affluent individuals own a premium bank account. Free standard current accounts remain the default option for this segment.

By drawing on Mintel’s exclusively commissioned research, this report closely examines the mass affluent in relation to the mass retail and HNW segments. The report analyses premium account ownership and key developments in this wealth target market as well as issues such as why only a minority of affluent individuals have traded up to a premium account. It concludes by looking at consumers’ current account switching behaviour and intentions followed by the most influential factors when choosing a premium account.

The focus of this report is on premium banking services aimed at the mass affluent segment (eg HSBC Premier, Barclays Premier). The wealth target market is defined in this report as those with investible assets of at least £50,000 or household income of at least £100,000. The market for full private banking services is outside the scope of this report, although Mintel has made some references to this sector in order to provide context.

Although premium bank accounts typically come with additional services and benefits and may charge a fee (sometimes waived on meeting certain criteria), they should not be confused with standard fee-based packaged accounts for mass retail consumers (eg Lloyds Bank’s Silver, Gold and Platinum current accounts and RBS’s Royalties Gold account).

For the purposes of this report, the key difference between packaged and premium accounts is whether or not the account has any qualification criteria based on either income or wealth. Packaged accounts are normally available to all customers for a fee, while premium bank accounts are usually only available to customers with a certain amount of investible assets and/or household income.

For more information on the mass retail market, please refer to Mintel’s Packaged and Current Accounts – UK, July 2014 and Consumers and Retail Banking – UK, September 2014 reports.

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