Identifying the
Emerging Affluent
to Start Lifelong
Relationships
A Financial Marketer’s Guide
to Mass Affluent Millennials
All data referred to in this report is sourced
from IXI Services WealthComplete®,
MarketMix™, and Financial Cohorts®, which
includes data from GfK MRI.
If you’re marketing to Millennials,
you need a new playbook
The emergence of the Millennial generation has many financial institutions eager to form lasting
connections with these younger consumers, who now are entering financial independence.
Millennials have just under $1.5 trillion in aggregate investable assets, or a little more than 5% of
the U.S. total. In relative terms, this is a small portion of the total investable assets, but it represents
a group of customers that by virtue of their age will be around for a long time with assets that are
expected to grow.
But Millennials look and behave uniquely. They differ dramatically from past generations in their
preferences, media consumption behaviors, and how they respond to certain types of marketing
messages. Financial marketers cannot simply employ the same playbook that worked for Baby
Boomers and Generation X.
Here, we’ll take a deep look at the Millennial generation and how its financial profile differs from
prior generations, how different groups of Millennials differ from one another, and then tackle some
of the best tactics marketers should employ for reaching this generation.
Some Definitions:
Millennials
Wealth Tiers
For the purpose of this report, the term
“Millennial” refers to any consumer born
between 1980 and 2000. Using this line, there
are approximately 17.6 million households
headed by Millennials in the U.S. Because
many Millennials are not yet heads of
household, but are still part of their broader
family units, these numbers likely represent
lower, more conservative estimates.
When discussing wealth tiers, IXI Services
divides consumers into three tiers: mass
market, mass affluent, and affluent. Those tiers
are defined as follows:
■■ Mass Market: Households with less than
$100,000 in total investable assets.
■■ Mass Affluent: Households with $100,000
up to $1 million in investable assets.
■■ Affluent: Households with more than
$1 million in investable assets.
Investment portfolios of Millennials
Millennials hold only 5.4% of all the financial assets in the U.S.
— about $1.5 trillion — and have more money in deposits than
any other generation, at 31%. But drill down to the different
asset tiers, and you’ll find that not all Millennials are the same.
Affluent and Mass Affluent Millennials look quite different from
their Mass Market Millennial peers, and, in some cases, their
financial profile resembles that of Baby Boomers.
Banks and financial
marketers targeting
Millennials can’t build
a strategy around the
idea that the entire
generation is the same.
Instead, they need to
look at different tiers
and strategize around
different kinds of
consumers.
Affluent Millennials have 21% of their money in deposits, and
63% combined in stocks and mutual funds, much like Baby
Boomers.
Mass Affluent Millennials take on different characteristics,
with portfolios that are heavier in mutual funds (37%), but close
to one-third in deposits (32%).
And Mass Market Millennials look very different. Nearly 60%
of their assets are in deposits, with 34% in stocks and mutual
funds, and just 1% residing in bonds.
Mass Market
Mass Affluent
Affluent
<$100K
$100K - $1M
$1M+
1%
8%
8%
3%
9%
7%
9%
32%
19%
24%
21%
59%
32%
31%
37%
Average household assets: $15K
Number of U.S. households: 15.5M
Deposits
Source: IXI Services WealthComplete®, 2014
Average household assets: $270K
Number of U.S. households: 2M
Mutual Funds
Stocks
Bonds
Average household assets: $3.8M
Number of U.S. households: 188K
Other
Looking for emerging affluent Millennials?
Focus on the Mass Affluent.
Perhaps no segment of the Millennial population is more important to financial marketers than the
Mass Affluent. This group has started to amass wealth when compared to their Millennial peers
in the Mass Market tier. Income, spending, and credit balance are higher for these folks, roughly
on the order of a 2:1 ratio. For the Mass Affluent, the higher levels of spending and credit can be
supported by a foundation of assets that is roughly 30 times higher than the Mass Market.
These consumers are much more likely to move into the Affluent tier over the course of their
lives than Mass Market consumers, so, it’s within a marketer’s best interest to consider them the
“emerging affluent.” Therefore, marketers will likely want to build relationships early, cementing
a bond that will last as the Mass Affluent become heads of the household and progress into the
Affluent tier.
Comparison of Mass Affluent and Mass Market Millennials
Estimated Annual Household Economics
Assets
$269,937
$14,697
$109,717
Income
Discretionary
Spending
Credit
Balance
$55,252
$76,490
$35,586
$132,196
$65,507
Source: IXI Services WealthComplete®, Income360®, Discretionary Spending Dollars™, and CreditStyles® Pro, 2014. Credit Balance includes mortgage.
Discretionary Spending reflects the amount the household likely spends on discretionary items after accounting for the fixed expenses of life (housing,
utilities, public transportation, personal insurance
and pensions).
Mass
Affluent Millennials
Mass Market Millennials
What are they like?
When it comes to their professional lives, Mass Affluent Millennials can be described as
ambitious, with an appetite for advancing in their careers and assuming leadership positions.
While the prevailing consensus of the Millennial generation is that many members of the
generation are slow to start their careers, the Mass Affluent go in the opposite direction, and
are keen to begin working toward the future. They have a propensity for jobs that they consider
careers, and may view their current industry as one they will remain in for a considerable
amount of time. It should come as no surprise that Mass Affluent Millennials are also an
educated group, indexing highly for a bachelor’s or post-graduate degree. And, despite being
relatively young, they index highly for leadership and supervisory positions.
This is a generation that also wants to keep working. Many Mass Affluent Millennials feel they
would continue working even if they won the lottery, and also express a goal to make it to the
top of their profession.
Finally, Mass Affluent Millennials are very materially driven, with a belief that material possessions
and wealth are very important to them. This perhaps ties back to their ambition and drive to
succeed in their careers.
Mass Affluent
Millennials are
ambitious, with
an appetite for
advancing their
careers.
Where do they live?
The areas with the highest concentration of Millennials are typically significant metro areas,
such as New York, Los Angeles, Chicago, and Washington D.C. When the measure is adjusted
to density of Millennials, the top 10 areas change slightly, becoming more heavily associated
with college towns and university populations such as the University of Iowa, at Ames; Penn
State; and the University of Illinois at Urbana/Champaign.
But if we really dive into the numbers and identify the top 10 metro regions with highest
concentration of Mass Affluent Millennial households compared to the Millennial population,
we start to see some trends. It is the usual list of significant metro areas, but the pure college
towns are gone. The Mass Affluent are concentrated in the tech-heavy areas of California;
the advertising/media/finance industries of the greater New York City area, including portions
of lower Connecticut; the science and technology corridors of the Boston area, and the
government and policy areas of Washington D.C. In general, Mass Affluent Millennials are in the
“right” places to drive the economy and themselves forward.
Top 10 Metro Regions with Highest Concentration of Mass Affluent Millennial
Households Compared to Millennial Population
Rank
Metro Region
Concentration
of
Mass Affluent
Millennials
1
San Jose-Sunnyvale-Santa Clara, CA
32.9%
$288,139
$122,834
$73,080
2
San Francisco-Oakland-Fremont, CA
29.9%
$296,420
$170,309
$89,843
3
New York-Northern New Jersey-Long Island, NY-NJ-PA
25.2%
$294,735
$127,570
$106,736
4
Boston-Cambridge-Quincy, MA-NH
23.2%
$282,081
$111,780
$73,363
5
Washington-Arlington-Alexandria, DC-VA-MD-WV
22.5%
$264,915
$134,795
$104,526
6
Buffalo-Niagara Falls, NY
22.3%
$245,890
$70,815
$41,802
7
Bridgeport-Stamford-Norwalk, CT
22.1%
$304,028
$113,069
$60,035
8
Santa Cruz-Watsonville, CA
22.0%
$302,410
$119,799
$80,698
9
Trenton-Ewing, NJ
21.2%
$281,060
$112,775
$73,056
10
Napa, CA
19.8%
$298,817
$118,646
$80,308
Source: IXI Services MarketMix™, 2014
Assets
Annual
Income
Annual
Discretionary
Spending
Tips for marketing
to Mass Affluent Millennials
Messaging and themes
Millennials have entered their careers right after the “great
recession,” and it seems like every day there is a report about
the challenges this generation faces, from low job prospects to
huge student loans that make saving money very difficult. While
much of the press forecasts doom and gloom, many younger
consumers are taking life by the horns. We know that Mass
Affluent Millennials are interested in starting careers right now,
and that they are also very likely to hold leadership positions, or
at least aspire to them. Marketing messages should reflect this
optimistic outlook whenever possible.
Another theme closely tied to this is the idea of financial security.
While this generation has lower rates of marriage compared to
prior generations, they are expressing positive attitudes and
aspirations about being married. In other words, Millennials want
to settle down. Promoting financial security is a great way to
earn their trust as they build for the long term.
Perhaps as another circumstance of these formative times,
Millennials are also a generation that constantly looks for
added value. Financial marketers would do well to promote
and highlight benefits in their campaign messaging, including
rewards programs, points and cash back offers. This kind of
value-add is an important element that drives this generation’s
choices and behaviors.
Finally, marketers need to remember that Millennials are a
digital generation. Prior generations still value the personal
connection of going to the bank and talking to a teller. This
younger generation is adept at technologies and comfortable
banking online from anywhere – 30% are likely to use a financial
or banking application on their phone. They are looking for
convenience, coverage, and the ease of electronic transactions.
All marketing aimed at Millennials needs to reflect this mindset.
Promoting
financial security
is a great way to
earn their trust
as they build for
the long term.
Channels and approaches
This digital inclination goes well beyond ad messaging, of course. Marketers need to take this
always-online generation’s behavior into account with media planning as well.
Millennials are unique in that they move across channels fluently throughout the day. Nearly a
third say they are likely to use phone to check websites for financial information, showing that
this generation sees no distinction between desktop and mobile Internet access. Marketers
need an omni-channel approach if they want to get a Millennial consumer’s attention and
remain relevant.
Finally, marketers need to remember that they won’t be the only ones delivering a convincing
message. Millennials are an open generation, one that shares insight and opinion about
everything from financial products to movies or meals. Friends and family members are huge
sources of advice, and Millennials are more likely to trust their friends more than financial
advisers. In fact, a recommendation from a friend is more important to them than an institution’s
financial security and history. By building easily digestible and shareable facts into ad creative,
marketers make it easy for existing customers to share benchmarks and benefits with curious
friends and peers.
Millennials are
more likely
to trust their
friends more
than financial
advisers.
Start nurturing Millennial
relationships now
Financial marketers should always look for customers that represent high growth potential, and
there is perhaps no better audience right now than Mass Affluent Millennials. This generation,
which is just coming into its own in terms of saving, spending and accumulating wealth, is at the
stage where it is looking to build relationships with trusted advisors. These financial relationships
may be simple now, but as this generation moves toward affluence, its needs will evolve and
become more complex. As that happens, there is a strong likelihood that Millennials will turn to
the institutions that they have known and invested with in the past.
By using media strategies and creative that meet these emerging affluent consumers where
they are interacting with media, financial marketers can begin to establish these long-term
relationships today.
Why IXI Services?
For over 20 years, IXI™ Services, a division of Equifax Inc., has helped
the nation’s leading financial services and consumer marketing firms
optimize omni-channel marketing efforts, identify growth markets, and
enhance practice and performance management. With the help of our
comprehensive suite of analytical, digital, marketing, software, and data
solutions, marketers can build more profitable business relationship
with consumers.
Our specialty in anonymous, direct-measured data differentiates
our ability to better connect our clients with their optimal customers.
We help our clients expand their view of customers’ and prospects’
full financial wallet by providing insights on wealth, income, spending,
credit, investment style, share-of-wallet, and share-of-market.
Foundation of Measured Assets
Our insights are based on about $13 trillion in anonymous,
aggregated measured consumer assets collected from leading
financial services firms. This “direct-measured” data represents
about 43 percent of all U.S. consumer invested assets and serves
as the foundation of our unique measures of consumer financial
capacity, investment style, behaviors, and characteristics.
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as a factor in establishing or determining an individual’s eligibility for personal credit,
insurance, or employment, or for any other purpose contemplated under the Fair
Credit Reporting Act, 15 U.S.C. § 1681 et seq. IXI products discussed herein neither
contain nor reveal any personally identifiable information. At no time does IXI obtain
or provide a credit score associated with any individual or household.
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