Lifestage Marketing in Financial Services - US - July 2018

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