About this Report

At a time when many financial-services providers are competing for qualified affluent customers, the ability to identify and understand Emerging Affluent households better could prove to be particularly profitable. Consumer Financial Decisions has designed an affluent segmentation to enable financial-services providers to market more effectively to desirable Emerging Affluent households.

Emerging Affluent households represent a promising opportunity for financial-services providers for the following reasons:

• A ten-year trend shows segment growth from roughly 3 million households in 2000 to 5.3 million households in 2010.
• Emerging Affluent households represent an up-and-coming segment whose increasing wealth and fluid loyalties might be easier to capture than those of more established affluent groups.
• Although the Emerging Affluent may represent only marginal short-term profits, they represent the largest net present value in the long term.
• In these times of institutional consolidation and product convergence, Emerging Affluent households are more likely than not to stay with existing providers as their wealth increases and their financial needs become broader.

As the youngest of the affluent groups, Emerging Affluent households currently have relatively few investible assets. Consequently, these households are often below the radar of most institutions that target the affluent. Although some institutions may believe that they can wait until the Emerging Affluent accumulate more wealth, this strategy in the New Normal (post 2008 recession) may prove to be a mistake.

This report sheds some light on how Emerging Affluent households are similar to and different from Other Affluent households. The following are several highlights from this report:

• The Emerging Affluent are solid, upper-middle-class households. As such, they are in a somewhat precarious position in today's society. A reversal of fortune, such as a job loss or a major medical emergency, could quickly cause their household to slip back to mass-market status.
• Because they are exceptionally busy, nearly three in five Emerging Affluent households say they prefer to spend as little time making investment decisions as possible.
• The key to attracting Emerging Affluent households is to understand—better than your competition does—their goals and purposes for borrowing and the topics about which they would like to learn more. Financial-services providers that use this understanding to attract, initiate, or expand a relationship with Emerging Affluent households will secure a reliable source of profits for the foreseeable future.

The use of findings from this report can help you fine-tune your marketing efforts to Emerging Affluent households. Through a strategic partnership with Information Asset Partners (IAP), you can locate Emerging Affluent households in your customer database, your prospect list, or your market footprint.

Table of Contents

Executive Summary	1
The Emerging Affluent: Definition	2
Who the Emerging Affluent Are	4
Balance Sheet	6
Products, Services, and Accounts	9
Channel	12
Plans for the Future	14
Institutions	16
Information, Advice, and Advisors	20
Conclusions	25
Tables
Demographics	4
General Attitudes	5
Liabilities	7
Credit Attitudes	7
Life Insurance Attitudes	8
Assets	9
Account Ownership	10
General Investment Attitudes	10
Financial-Product Use	11
Delivery Channels	12
Financial Transactions Attitudes	13
Spending Attitudes	14
Confidence Attitudes	18
Service Attitudes	21
Information and Advice Attitudes	22
Savings Goals	23
Purposes for Borrowing	23
Retirement Attitudes	23
Figures
Affluent Household Segmentation	2
Affluent Household Segmentation Trend	3
Net Worth and Other Calculated Variables	6
Wills, Powers of Attorney, and Estate Executor	15
Financial Institution Use	16
Assets by Institution	17
Have "A Great Deal" of Trust in Institutions	19
Have "A Great Deal" of Trust in Intermediaries	20
Who Has Financial Control versus Financial-Control Preference	21
Interest in Learning More about Financial Topics	24