Table of Contents
Executive Summary
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- The issues
- America is aging
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- Figure 1: Growth in US population, by age, 2015 versus 2025
- Different generations use different media channels
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- Figure 2: Sources of financial information, by generation, October 2015
- The opportunities
- Focus on retirement planning and income distribution
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- Figure 3: Amount in retirement account(s), by generation, May 2015
- Millennials want to save for children’s education
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- Figure 4: Millennials interested in education savings account, by type of goal, October 2015
- Few believe they have enough life insurance
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- Figure 5: Life insurance ownership, by generation, October 2015
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- Figure 6: Buying life insurance as a goal, by generation, October 2015
- What it means
The Market – What You Need to Know
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- An aging population
- More older people will continue working
- Most – but not all – are doing better financially
- Unemployment continues to improve
- Debt is still a challenge
Market Breakdown
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- An aging America
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- Figure 7: US population by age, 2015, 2020, 2525
- Labor force participation
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- Figure 8: Labor force participation by age, 1992, 2002, 2012, 2022 (projected)
Market Factors
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- Most – but not all – are doing better financially
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- Figure 9: Average income and average expenditures, by age, 2014
- Unemployment headed down for all generations
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- Figure 10: US unemployment rate October 2014-October 2015
- Debt is still an issue
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- Figure 11: Total debt distribution, Q2 2013-Q2 2015
Key Players – What You Need to Know
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- Tech tools are popular among all generations
- Expanded use of video
- Gen X – the “lost” generation
What’s Working?
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- Tech tools are useful to all generations
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- Figure 12: Vanguard Personal Advisor Services online ad, 2015
- Expanded use of video
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- Figure 13: Interested in financial education videos, by generation, November 2014
What’s Struggling?
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- Gen X – the “lost” generation
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- Figure 14: Switched primary checking account provider, by generation, November 2014
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- Figure 15: US population distribution, by generation, 2015, 2020
The Consumer – What You Need to Know
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- Different priorities for different lifestages
- Young people get information from a wider variety of media
- Incentives may help increase mobile payment system usage
- Young people are looking for advice alternatives
- Location is still the most important feature in a bank
Key Financial Goals
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- Short-term goals: paying debt and saving
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- Figure 16: Most popular short-term goals, October 2015
- Eliminating debt versus saving for retirement
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- Figure 17: Short-term goals, by generation, October 2015
- Being a parent changes financial priorities
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- Figure 18: Short-term goals, by gender and parental status, October 2015
- Advice and short-term goals
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- Figure 19: Interest in adviser for short-term goals, October 2015
- Medium-term goals: save money for the longer term
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- Figure 20: Medium-term goals, October 2015
- Older Millennials are increasingly focused on their finances
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- Figure 21: Medium-term goals, by generation, October 2015
- Income impacts engagement with finances
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- Figure 22: Medium-term goals, by age and household income, October 2015
- Advice is needed for medium-term goals
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- Figure 23: Interest in adviser for medium-term goals, October 2015
- Long-term goals: dominated by retirement
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- Figure 24: Long-term goals, October 2015
- iGens are planning for the long term
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- Figure 25: Long-term goals, by generation, October 2015
- Singles are looking forward
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- Figure 26: Long-term goals, by marital status, October 2015
- Few want advisers to help with long-term goals
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- Figure 27: Interest in adviser for long-term goals, October 2015
- Consumers’ goals in their own words
- Millennials
- Older Millennials/Younger Gen Xers
- Older Gen Xers/Early Baby Boomers
- Late Baby Boomers/WWII/Swing Generations
Source of Financial Information
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- Young people get information from a wider variety of media
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- Figure 28: Top five sources of financial information, by generation, October 2014
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- Figure 29: Navy Federal Credit Union online ad, 2015, Capital One 360 email, 2015
- Millennial men are easier to reach than are Millennial women
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- Figure 30: Sources of financial information, by gender and generation, October 2015
- Hispanics are easier to reach
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- Figure 31: Sources of financial information, by Hispanic origin, October 2015
- Use television to reach Blacks
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- Figure 32: Sources of financial information, by race, October 2015
Responses to Financial Services Ads
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- Television is still relevant
- Millennials
- Older Millennials/Younger Gen Xers
- Older Gen Xers/Early Baby Boomers
- Late Baby Boomers/WWII/Swing Generations
- Ads need to focus on benefits and build trust
- Millennials
- Older Gen Xers/Early Baby Boomers
- Late Baby Boomers/WWI/Swing Generations
- Millennials are most responsive to advertising
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- Figure 33: Responses to financial services ad, by generation, October 2015
- Men are more likely to respond to financial ads
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- Figure 34: Responses to financial services ad, by generation, October 2015
What Consumers Want from Financial Institutions
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- Financial understanding increases with age – and so does the use of an adviser
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- Figure 35: Betterment online ad, 2015
- There is opportunity for advisers at all lifestages
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- Figure 36: Understanding of financial topics, by generation, October 2015
- Women are far less confident than men
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- Figure 37: Understanding of financial topics, by gender and age, October 2015
- Bundling may attract Millennials
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- Figure 38: Choosing a financial institution, by gender and age, October 2015
- Hispanics more likely to choose institution carefully
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- Figure 39: Choosing a financial institution, by Hispanic origin, October 2015
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- Figure 40: BankAmeriDeal email ad, 2015
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- Figure 41: BofA Preferred Rewards direct mail ad, 2015
- Asians and Hispanics need life insurance
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- Figure 42: Have enough life insurance to protect family, by race and Hispanic origin, October 2014
The Attraction of Technology
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- Millennials are most interested in internet-only banks
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- Figure 43: Current use and future use of internet-only bank, by generation, October 2014
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- Figure 44: Ally Bank print ad, 2015
- Parents – especially dads – like internet-only banks
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- Figure 45: Current use and future use of internet-only bank, by parental status and presence of children, October 2015
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- Figure 46: Ally Bank banner ad, 2015
- Incentives will help drive mobile payment systems usage
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- Figure 47: Current and future use of mobile payment systems, by generation, October 2015
- Income matters, too
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- Figure 48: Current and future use of internet-only bank, by age and household income, October 2015
- Mobile payment growth may be challenged
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- Figure 49: Current and future use of mobile payment system, by age and household income, October 2015
- Parents are a prime market
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- Figure 50: Current and future use of mobile payment system, by age and household income, October 2015
- How technology has changed banking
- Millennials
- Older Millennials/Younger Gen Xers
- Older Gen Xers/Early Baby Boomers
- Late Baby Boomers/WWI/Swing Generations
Plans for Handling Finances
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- The need for advice is clear
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- Figure 51: Financial planning activities, by generation, August 2015
- Parents are looking for advice
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- Figure 52: Interest in financial adviser, by parental status, October 2015
- Young people are looking for alternatives to traditional financial services
- Advice
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- Figure 53: Interest in financial advice, by generation, October 2015
- Banks
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- Figure 54: Interest in alternative banks, by generation, October 2015
- Advice people already use
- Millennials
- Late Baby Boomers/WWI/Swing Generations
Important Features in a Financial Institution
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- Location is still the most important feature
- Different generations seek out different features
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- Figure 55: Five most important features in a financial institution, by generation, October 2015
- Priorities of different generations
- Millennials
- Older Millennials/Younger Gen Xers
- Older Gen Xers/Early Baby Boomers
- Late Baby Boomers/WWII/Swing Generations
- Parents and non-parents have different priorities
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- Figure 56: Five most important features in a financial institution, by parental status, October 2015
- Hispanics actively look for information
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- Figure 57: Features important in a financial institution, by Hispanic origin, October 2015
Attitudes toward Personal Finances
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- Financial security is of paramount importance
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- Figure 58: Financial priorities, by generation, October 2015
- Life circumstances change priorities
- Millennials
- Older Millennials/Younger Gen Xers
- Older Gen Xers/Early Baby Boomers
- Late Baby Boomers/Swing/WWII generation
- Attitudes toward financial services industry and institutions
- The advice industry needs to adapt
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- Figure 59: Attitudes toward financial industry and institutions, by generation, October 2015
- Attitudes toward financial tools
- Security
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- Figure 60: Attitudes toward financial tools, by generation, October 2015
- Attitude toward own personal financial situation
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- Figure 61: Optimism about own personal financial situation, by generation, October 2015
- Optimism is highest among young high earners
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- Figure 62: Outlook on personal financial situation, by age and household income, October 2015
- Hispanics and Blacks are more optimistic
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- Figure 63: Outlook on personal financial situation, by Hispanic origin and race, October 2015
What’s More Important: Money or Time?
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- Millennials
- Older Millennials/Younger Gen Xers
- Older Gen Xers/Early Baby Boomers
- Late Baby Boomers/WWII/Swing generations
Appendix – Data Sources and Abbreviations
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- Data sources
- Consumer survey data
- Consumer qualitative research
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
Appendix – Consumer
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- Most important features in a financial institution
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- Figure 64: Five most important features in a primary financial institution, by demographics, October 2015
- Have enough life insurance
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- Figure 65: Believe have enough life insurance, by demographics, October 2015
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