A new Impact Note from Aite Group, LLC examines specific demographic data, and the needs and wants of retail brokerage customers.
The mass-affluent demographic receives particular emphasis, as a number of firms have instituted targeted efforts at reaching that consumer group, including the recent merger announcement between Wachovia and AG Edwards.
In general, brokerages emphasize relationships with financial advisors to be a core competency; however, only 5 percent of the mass-affluent market rely on financial advisors for their primary investment advice when they are active users of online brokerage tools. Instead, they are likely to value robust online stock and fund screening tools and online research.
“While brokerage firms move the customer sweet spot from high-net-worth investors to a more-target-rich market of mass-affluent investors, many would do well to note this is not a single bucket of individuals,” says Adam HonorИ, senior analyst at Aite Group and author of the note. “Those in the demographic who leverage online capabilities are demanding customers. They are younger than their high-net-worth peers and much more self-help oriented in their investing style. For that reason, firms ignoring their online capabilities in favor of pretty statements and