Effectively Serving the Mass Affluent

by Ashley Globerman,  William Trout, March 17, 2015
Industry Trends
EMEA, North America

Abstract

Wealth managers today face the question of how to effectively capture and retain the next generation clients, who are, for the most part, in the mass market (MM) or mass affluent (MA) investor segments and part of Generation X and Y.

In the report Effectively Serving the Mass Affluent, Celent assesses the MA client segment and studies how this customer group offers wealth managers a great, albeit perplexing opportunity to profitably thrive in today’s environment. Celent defines the MA segment as those individuals who hold between $250K and $1 million in investable assets.

“Our estimates show that the mass affluent segment makes up approximately 16% of the US retail investor population, second in size to the mass market,” says William Trout, a senior analyst with Celent’s Wealth Management practice and coauthor of the report. “While Generation X and Generation Y are not synonymous with ‘mass affluent’ per se, they can serve as a prism for understanding this particular customer segment.”

Some of the main findings of this survey are as follows:

  • The mass affluent segment is a challenge to serve profitably, but represents a strong opportunity for wealth managers who can appropriately segment this market and deliver the right products through the right delivery channels.
  • The upward mobility of the MA market will become a greater focal point across the industryas wealth managers reach saturation with respect to existing high net worth and ultra-high net worth clients
  • Improvements in technology and automation can enable wealth managers to serve mass affluent clients with solutions historically only available to high net worth investors.
  • At the enterprise level, the benefits offered by an integrated platform can translate into more cost-efficient delivery and an improved experience for the mass affluent client.

“Technology and customer segmentation will be key drivers in successfully capturing the mass affluent market,” says Ashley Globerman, an analyst with Celent’s Wealth Management practice and coauthor of the report. “Robust digital strategies, the digitization of processes and data, flexible investment architectures, and tailoring products and services based on specific client classifications will enable firms to acquire this customer segment.”

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

 

Key Research Questions

1

Introduction

2

 

Mass Affluent Today

2

 

Key Research Questions

2

Segment Overview

4

 

Demographics

4

Capturing the Mass Affluent Opportunity

11

 

Advisory Platforms and Delivery Channels

11

 

Advisory Platforms

13

 

The Value of a Single Platform

15

 

Segmentation

16

Final Thoughts

17

Leveraging Celent’s Expertise

18

 

Support for Financial Institutions

18

 

Support for Vendors

18

Related Celent Research

19

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