Table of Contents
Executive Summary
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- The issues
- Literacy is not being taught
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- Figure 1: Attitudes toward personal finance, by household income, March 2016
- Few consumers are confident in their knowledge
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- Figure 2: Self-described grade on financial knowledge, by gender, March 2016
- The opportunities
- Reach out to college students
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- Figure 3: Attitudes toward financial institutions, December 2014
- Educating consumers may lead to more profits
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- Figure 4: Interest in seminars to learn about financial topics, by age and gender, March 2016
- What it means
The Market – What You Need to Know
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- Increase in Hispanic population
- Number of families below poverty level is increasing
Market Factors
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- Increase in Hispanic population
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- Figure 5: Population by Hispanic origin, 2010-20
- Number of families below poverty level is increasing
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- Figure 6: Percentage of families with incomes below the poverty rate
Key Players – What You Need to Know
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- FINRA
- Banks find that literacy is profitable
- Bank of America partnership with Khan Academy
- Capital One and Consumer Action
- Banks partner with schools
- States are lagging in their literacy efforts
What’s Working?
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- FINRA is working hard to increase financial literacy
- Banks find that literacy is profitable
- Bank of America and Khan Academy
- Capital One and Consumer Action
- Banks partner with schools
What’s Struggling?
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- Encouraging new customers requires literacy effort
- High school students are not getting a financial education
- College students are not in much better shape
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- Figure 7: Financial concerns after graduation, December 2014
- Online resources are available – but are they used?
What’s Next?
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- Native advertising
The Consumer – What You Need to Know
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- Millennials are biggest users of alternative products
- Large banks hold half of primary accounts
- Most consumers are not planning for the future
- An increased awareness of personal financial responsibility
- Websites are preferable to mobile apps
Ownership of Financial Products
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- Majority of consumers have a checking and savings account
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- Figure 8: Ownership of financial products, March 2016
- Millennials are biggest users of alternative products
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- Figure 9: Ownership of financial products, by generation, March 2016
- Hispanics more likely to prefer alternative products
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- Figure 10: Ownership of financial products, by Hispanic origin, March 2016
Location of Primary Account
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- Large banks hold half of primary accounts
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- Figure 11: Location of primary account, March 2016
- Millennials most likely to use online banks
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- Figure 12: Location of primary account, by generation, March 2016
- Hispanics prefer large banks
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- Figure 13: Location of primary account, by race and Hispanic origin, March 2016
Financial Habits
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- Money management
- Young people have day-to-day financial struggles
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- Figure 14: Financial habits, by generation, March 2016
- Blacks are struggling with money management, too
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- Figure 15: Financial habits, by race, March 2016
- Financial planning and execution
- Most are not planning for the future
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- Figure 16: Financial habits, by generation, March 2016
- Parents plan more than nonparents do
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- Figure 17: Financial habits, by parental status, March 2016
- Blacks are not saving money
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- Figure 18: Financial habits, by race, March 2016
- Budgets are a part of most consumers’ lives
- Credit Management
- Singles least likely to check credit score
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- Figure 19: Financial habits, by marital status, March 2016
- Credit card balances are the difference between good grades and bad
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- Figure 20: Financial habits, by self-described grade on financial knowledge, March 2016
Sources of Information About Personal Finance
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- Family is the most popular source of financial information
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- Figure 21: Sources of financial information, March 2016
- Family most important to young consumers
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- Figure 22: Sources of financial information, by generation, March 2016
- Respondents often use a variety of sources
Self-Described Grade on Financial Knowledge
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- Men give themselves higher grades
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- Figure 23: Self-described grade on financial knowledge, by gender, March 2016
- Blacks are not confident
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- Figure 24: Self-described grade on financial knowledge, by race, March 2016
- Confidence increases with household income
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- Figure 25: Self-described grade on financial knowledge, by household income, March 2016
- The effect of income on confidence
- Young urban parents believe they are financially literate
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- Figure 26: Self-described grade on knowledge of personal finance – CHAID – Tree output, March 2016
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- Figure 27: Self-described grade on knowledge of personal finance – CHAID – Table output, March 2016
- CHAID analysis methodology
Interest in Financial Education
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- Online resources are preferred
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- Figure 28: Interest in financial education, March 2016
- Reaching Millennials
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- Figure 29: Interest in financial education, Millennials, March 2016
- Seminars may reach more Hispanics
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- Figure 30: Interest in financial education, by Hispanic origin, March 2016
Attitudes toward Personal Finance
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- An increased awareness of personal financial responsibility
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- Figure 31: Attitudes toward financial services, March 2016
- Millennials need – and want – help
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- Figure 32: Attitudes toward personal finance, Millennials, March 2016
- Disconnect between risk and reward
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- Figure 33: Attitudes toward personal finance, March 2016
- Hispanics need credit management help
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- Figure 34: Attitudes toward personal finance, by Hispanic origin, March 2016
- Consumers who give themselves As are more optimistic
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- Figure 35: Attitudes toward personal finance, by self-described grade on financial knowledge, March 2016
Preferred Methods of Communication
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- Websites are preferable to mobile apps
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- Figure 36: Preferred methods of communication, March 2016
- In-person communication is preferable to phones
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- Figure 37: Preferred methods of communication, by generation, March 2016
- Mobile communication is important to Hispanics
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- Figure 38: Preferred methods of communication, by Hispanic origin, March 2016
Major Financial Challenges
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- Men want help investing
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- Figure 39: Attitudes toward traditional financial services, by gender, March 2016
- Credit scores are an issue
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- Figure 40: Attitudes toward traditional financial services, by generation, parental status, March 2016
- Hispanics have challenges and are looking for help
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- Figure 41: Attitudes toward traditional financial services, by Hispanic origin, March 2016
- Major financial concerns
Satisfaction With Financial Services Companies
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- Men are satisfied, but open to alternatives
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- Figure 42: Attitudes toward traditional financial services, by gender, March 2016
- Parents may be looking for more
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- Figure 43: Attitudes toward traditional financial services, by parental status, March 2016
Trust in Financial Services Companies
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- Trust in banks is greater among young consumers
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- Figure 44: Attitudes toward traditional financial services, by generation, March 2016
- Blacks are much less likely than Whites to trust banks
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- Figure 45: Attitudes toward traditional financial services, by race, March 2016
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Consumer survey data
- Consumer qualitative research
- Direct marketing creative
- Terms
Appendix – Consumer
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- Figure 46: Attitudes and opinions about personal finance, by gender, October 2014-December 2015
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- Figure 47: Attitudes and opinions about personal finance, by race and Hispanic origin, October 2014-December 2015
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- Figure 48: Attitudes and opinions about personal finance, by age, October 2014-December 2015
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- Figure 49: Attitudes and opinions about personal finance, by household income, October 2014-December 2015
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