The mass affluent – defined here as consumers with liquid assets of at least USD 100,000 – represent a key target cohort for banks around the world. Your ability to successfully compete in this segment and win market share is critical to driving profitability. Mass affluents are a highly coveted segment for their overall higher product holding and how they generally tap into your most lucrative financial products: investments and home loans.
RFI Global’s ongoing research into this audience digs into what makes them tick and what they really value from their financial providers. If you want to unpick what drives mass affluent consumers to choose one financial services partner over another, read on as I reveal highlights of our recent data.
The challenge
Whilst the mass affluent offer strong profit potential, winning and retaining them is a complex affair. Mass affluent consumers are financially savvy and more likely to shop around for products and consider alternatives. Comfortable with maintaining relationships with multiple financial institutions, they are much more likely to spread their assets and products across several providers. Our research shows they are more inclined to compare providers’ fees and charges, interest rates, product packages and digital capabilities when compared to the non-affluent.
What is more, not only do they want their financial providers to have a good grasp of their personal circumstances, but they also expect them to understand their unique needs, be proactive, innovative and add value to their relationship. This calls for very tailored solutions.
“They expect providers to understand their unique needs, be proactive, innovative and add value to their relationship”
And if their needs aren’t met, they’re more inclined than your average customer to switch providers. Across the 11 markets we surveyed, 25% of the mass affluent are considering switching their primary financial provider, whilst only 17% of the non-affluent are prone to do the same.
The opportunity
Mass affluent consumers’ investment activity offers a striking opportunity for banks to deepen their relationship with them. 70% of the mass affluent we surveyed do invest. Also, they hold about one third of their total net investable assets in investments. Yet, when they place their capital, only some 40% rely solely on their main bank, whilst over half enlist multiple providers.
Tomorrow’s winning financial organisations are those that will have concocted the most attractive wealth propositions as their ‘secret sauce’. Indeed, 35% of mass affluent consumers plan to step up their investment activity over the next 12 months.
Over the next 12 months, the mass affluent are planning to invest
A superior wealth proposition will help not only acquire mass affluent consumers but also grow client value, through cross-selling. 31% of mass affluent consumers globally are looking to take up new financial products in the next 12 months, with investments ranked as the single most popular financial product among the future actives. Also, among those considering switching their main bank, accessing better investment and wealth management products and services emerges as top motivator, as quoted by more than a quarter of these consumers.
Our data reveals key factors influencing their choice of provider. Besides fees and charges, the institution’s historical investment performance and its reputation, strong advisory services coupled with solid digital platforms to track and manage their investments top their list of considerations when selecting an investment partner.
The mass affluent estimate that close to 60% of their investment decision-making is influenced by advisory services. Therefore, access to professional and tailored investment advice and to investment research materials are services mass affluent investors value highly. And they rank these factors among the biggest relationship pain-points.
Final thoughts
The mass affluent opportunity is sizeable, and it has long been on the radar of financial providers. The winners of this clientele stand to benefit from better cross-sell prospects, stronger customer KPIs, higher share of wallet and profitability.
“Mass affluent investors’ total investment holdings tend to be 6.5 times higher than these of the overall investor population”
Our data-driven insights paint a picture of such highly diverse group – with many sub-segments and ever-changing needs and demands – that it is no wonder only a few providers truly manage to meet mass affluents’ banking and investment needs.
Yet capturing their share of investment wallet is key to profitability given mass affluent investors’ total investment holdings tend to be 6.5 times higher than these of the overall investor population.
All data referred to in this article is sourced from RFI Global Priority and Retail Banking Council 2021-2022. For more information and data on the mass affluent segment’s financial relationships, needs and preferences, get in touch.
Avoiding the ‘Intergenerational Tragedy’
28 Nov 2023
The Rise of Mobile Wallets in Canada
14 Sep 2023 \ Payments
SME’s, Stress and Scrutiny of costs
29 Jun 2023 \ Sentiment \ SME
BNPL – Regulation and Legacy
31 May 2023 \ BNPL \ Regulation
March Trends Newsletter, The MacroMonitor
14 Mar 2023 \ Women
February Trends Newsletter, The MacroMonitor
15 Feb 2023
2023 – The Year of SoftPOS?
14 Feb 2023 \ SoftPOS
A Year in the Life of BNPL
02 Feb 2023 \ BNPL
January Trends Newsletter, The MacroMonitor
20 Jan 2023
2022 – The year that was
17 Jan 2023 \ banking predictions
Winning with Cross-Sell, Singapore Webinar
01 Nov 2022 \ webinar
Who are the FiTeRRs?
13 Sep 2022 \ inflation \ Mortgages \ Youth Banking
The Canadian Mortgage Market
08 Jun 2022 \ Canada \ Mortgages
The Global State of BNPL | Regional Deep Dive
05 May 2022 \ BNPL
RFI Report | Banking on Digital
30 Oct 2021 \ Global \ mobile banking
The BNPL Juggernaut
24 May 2021 \ BNPL \ In-depth Insights
Driving Sustainability in Finance
25 Apr 2021 \ Sustainability
Cookie | Duration | Description |
---|---|---|
cookielawinfo-checkbox-analytics | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics". |
cookielawinfo-checkbox-functional | 11 months | The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional". |
cookielawinfo-checkbox-necessary | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary". |
cookielawinfo-checkbox-others | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other. |
cookielawinfo-checkbox-performance | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance". |
viewed_cookie_policy | 11 months | The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data. |