The Affluent Consumer Market in Australia 2008

SUMMARY

Overview

Introduction

The affluent consumer market living in Australia provides an attractive market for financial institutions to target because of the wealth they hold. Datamonitor's Australia Financial Services Survey captures opinion from 422 affluent individuals.

Scope

Details affluent consumer demographics including age, working status, state and city of residence within Australia. Analyses the opportunity for online financial product arrangement within the affluent market. Analyses how prepared affluent Australians are for retirement and the use of financial planners. Reviews affluent market trends across HISA, credit card and mortgage product areas.

Report Highlights

While some financial institutions may think that the online financial services market in Australia is in its infancy, results show that providers should be investing more to further develop their online platform in order to meet the growing demands from affluent consumers.

It appears that the affluent population are thinking more and planning accordingly for their retirement as compared to the rest of the consumer market. There are more affluent individuals than mass market individuals that plan to retire before age 55 or who are already retired.

A large proportion of the affluent mortgage market is expected to change providers over the next five years. Companies need to ensure they are marketing their lending services to this group of clients and that they are offering what the majority of borrowers are looking for such as a competitive interest rate.

Reasons to Purchase

• Review competitor market shares of affluent and mass market consumers across HISAs, credit cards and mortgage products.
• Discover the age, location work status and more about the affluent market living in Australia.
• Identify which product areas will develop a strong online presence in the future.

TABLE OF CONTENTS

• Overview
  • Catalyst
  • Summary
  • Methodology
• Executive Summary
  • The majority of affluent people are 45 or older, retiredor work in a highly-skilled job and are mostly male
    • Most affluent consumers in Australia are either retired orwork in high-skilled occupations
    • Men are strongly represented in the Australian affluentmarket sample
  • The online financial services market has further room fordevelopment
    • Online product arrangement is a burgeoning market foraffluent consumers in Australia
    • However, providers can do more to serve the online needsof affluent consumers
  • As expected, affluent individuals are typically betterprepared for their retirement
    • The affluent consumer sample are in greater control oftheir retirement planning
    • The affluent population are more likely to turn tofinancial planners for their investments
  • The majority of the affluent market is happy with theircurrent HISA provider
    • ING Direct has the largest HISA market share of affluentindividuals in Australia
  • Affluent consumer typically have multiple credits thatthey pay off in full each month
    • Affluent consumers are more prone to having multiplecredit cards although most of these respondents pay their full monthlybalance off
  • Many affluent consumers are thinking about switchingmortgage providers over the next five years
    • Affluent respondents are more likely to switch theirmortgage provider over the short term as compared with the mass market
• Table of Contents
• Table of figures
• Table of tables
• Affluent consumer demographics
  • The majority of affluent people are 45 or older, retiredor work in a highly-skilled job and are male
    • Two-thirds of affluent respondents Australians are agedabove 45
    • Most affluent consumers surveyed in Australia are eitherretired or work in high-skilled occupations
    • Men are strongly represented in the Australian affluentmarket sample
    • The majority of the affluent sample are located in theeastern cities of Australia
    • Surveyed affluent Australians typically are well educatedindividuals
• Online product trends
  • The online financial services market has further room fordevelopment
    • Online product arrangement is a burgeoning market foraffluent consumers in Australia
    • However, providers can do more to serve the online needsof affluent consumers
    • Affluent consumers are more likely to have the means ofconducting business online however security concerns and a lack of trustare the main factors inhibiting online usage
• Investment planning trends
  • As expected, the affluent market is better prepared fortheir retirement
    • A quarter of the affluent population plan on retiring onor before they turn 60
    • The surveyed affluent consumers is in greater control ofits retirement planning
    • Affluent individuals are seeing their savings track wellon the way to retirement
    • Affluent individuals will also look at avenues outside ofsuperannuation to fund their retirement
    • The affluent sample surveyed is more likely to turn tofinancial planners than the mass market sample
    • Service was the most important factor when deciding on afinancial planner for affluent respondents, fees was ranked sixth
      • The least important factors when selecting a financialplanner included advertising and various media endorsements
    • Affluent consumers want more proactive advice on productsand better reporting relative to the mass market
    • The majority of affluent respondents are happy with theircurrent financial planning arrangement
• Consumer satisfaction and switching trends
  • The majority of affluent market is happy with theircurrent HISA provider and are unlikely to switch providers
    • ING Direct has the largest HISA market share of affluentrespondents
    • The majority of affluent respondents do not expect tochange their HISA provider over the next year
    • The majority of affluent consumers who switched HISAproviders over the last 12 months left CBA
    • Most affluent clients who switched HISA providers pursueda better interest rate on their account
  • Affluent consumer typically have multiple credits thatthey pay off in full each month
    • Affluent consumers are more prone to having multiplecredit cards although most of these respondents pay their full monthbalance off
    • The majority of affluent individuals have Visa brandedcredit cards
    • CBA has the largest credit card market share of affluentindividuals in Australia
    • Affluent consumers are happy with their main credit card,holding the same card for many years
    • Affluent clients are more concerned about rewards thanfees or interest rates relative to the mass market
  • Many affluent respondents are thinking about switchingmortgage providers over the next five years
    • Australia's big four banks are the leading mortgageproviders to the affluent market
    • Affluent respondents are more likely to switch theirmortgage provider over the short term as compared with the mass market
    • The interest rate was the most important factor foraffluent individuals when picking a lender
• APPENDIX
  • Data
  • Methodology
  • Further reading
  • Ask the analyst
  • Datamonitor consulting
  • Disclaimer
• List of Tables
  • Table 1: Age bands of the affluent market
  • Table 2: Gender of the affluent market
  • Table 3: Location in Australia of affluent market, bystate and city
  • Table 4: Minimum educational qualification achieved bythe affluent market
  • Table 5: Occupational type held by the affluent market
  • Table 6: Actual arrangement methods for the affluentmarket by various product
  • Table 7: Preferred arrangement methods for the affluentmarket by various product
  • Table 8: Reasons why the affluent market have notconsidered arranging a product online
  • Table 9: Planned retirement age for both the affluentmarket and mass market
  • Table 10: Attitudes towards retirement planning byaffluent market and mass market
  • Table 11: Product methods for funding retirement of theaffluent market and mass market
  • Table 12: Type of financial planner used by the affluentmarket and mass market
  • Table 13: Most common reasons for choosing a financialplanner by affluent market and mass market
  • Table 14: Least common reasons for choosing a financialplanner by affluent market and mass market
  • Table 15: Service areas for improvement for financialplanners by affluent market and mass market
  • Table 16: Proportion of the affluent market looking toget a new financial planning in the next 12 months
  • Table 17: Market share of affluent and mass HISA marketsby provider
  • Table 18: Have you switched your main high interestsavings account in the last 12 months?
  • Table 19: Who was your previous high interest savingsaccount with?
  • Table 20: Reason for switching HISA providers by theaffluent and mass markets
  • Table 21: Number of credit cards held the affluent andmass markets
  • Table 22: How much of the outstanding balance do youmanage to pay off each month?
  • Table 23: Credit card brands held by the affluent andmass markets
  • Table 24: Market share of the affluent and mass creditcard markets
  • Table 25: Length of time affluent and mass marketindividuals have held their main credit card
  • Table 26: How satisfied are you with your main creditcard?
  • Table 27: Appealing factors to the affluent and massmarkets when considering getting a new credit card
  • Table 28: Market share of affluent and mass mortgagemarkets held with providers
  • Table 29: Length of time the affluent and mass marketsexpect to keep their mortgage with their current provider
  • Table 30: Reasons why affluent and mass markets pickedtheir current mortgage providers
• List of Figures
  • Figure 1: A considerable proportion of affluentconsumers are using the internet to arrange financial products
  • Figure 2: ING Direct is the leading provider of HISAproducts to affluent people in Australia
  • Figure 3: The majority of affluent respondents are aged45 and over
  • Figure 4: The majority of affluent people surveyed areretired or work in highly skilled jobs
  • Figure 5: The majority of the affluent population livingin Australia are male
  • Figure 6: The proportion of affluent respondents livingin NSW, VIC, QLD and WA is higher than the share of the total samplepopulation living in those states
  • Figure 7: The majority of affluent people in Australiahave a formal education
  • Figure 8: A considerable proportion of affluentconsumers are using the internet to arrange financial products
  • Figure 9: There are substantial opportunities forproviders to further develop their online platforms
  • Figure 10: Security issues are the main deterrentstopping affluent consumers from arranging more products online
  • Figure 11: Over a third of the affluent populationsample in Australia are already retired
  • Figure 12: Affluent individuals appear to be in greatercontrol of their retirement
  • Figure 13: The majority of the affluent population ishappy with how they are tracking for retirement
  • Figure 14: Affluent individuals are more likely to usean income stream, HISA or investment property to fund their retirement
  • Figure 15: Affluent individuals are more likely to use afinancial planner than the mass market
  • Figure 16: Service reputation and professional adviceare the top ranking reasons why affluent individuals chose their financialplanner
  • Figure 17: Advertisements and endorsements are the leastlikely factors considered when affluent individuals are choosing afinancial planner
  • Figure 18: Affluent consumers want more regular updatesand face-to-face contact with their planner
  • Figure 19: Around four out five affluent respondents arehappy with their current financial planning arrangement
  • Figure 20: ING Direct is the leading provider of HISAproducts to affluent people in Australia
  • Figure 21: The majority of affluent consumers do notintend on switching their HISA provider in the next year
  • Figure 22: CBA had the most HISA affluent consumersswitch on them over the last 12 months
  • Figure 23: Getting a better interest rate was theleading reason why affluent people changed HISA providers
  • Figure 24: Affluent consumers are more likely to havemore than one credit card compared to the mass market
  • Figure 25: Affluent individuals are much more likely topay off their credit card balance in full each month
  • Figure 26: Visa is the leading brand of credit card heldby affluent individuals in Australia
  • Figure 27: CBA is the leading financial provider ofcredit cards to the affluent market
  • Figure 28: The majority of affluent clients are happywith their main credit card
  • Figure 29: Affluent respondents have held their creditcards for relatively longer periods of time as compared to mass market
  • Figure 30: Lower fees are most important to affluentconsumers when considering a new credit card
  • Figure 31: The big four banks in Australia are theleading mortgage providers to affluent people
  • Figure 32: Affluent respondents are more likely toswitch their mortgage provider over the short term
  • Figure 33: The interest rate was the most importantfactor for affluent individuals when picking a lender