MacroMonitor Market Trends Newsletter December 2014

The MacroMonitor Market Trends Newsletter from Consumer Financial Decisions (CFD) highlights topical news and trends of interest to you and your colleagues.

Middle-Market Opportunities

By most measures, the middle class in the United States is contracting. The definition of middle class, however, is elusive. In an effort to clarify a definition, CFD conducted an informal poll of MacroMonitor subscribers and prospects to learn how financial-services providers classify middle-class households. Although their answers varied, the majority define economic class by income. An average of the responses suggests that the Middle Market includes households with annual incomes between $50K and $125K—37% of US households, or 48 million households. Affluent and Wealthy households are households with annual incomes of $125K or higher—13% of US households, or 17.4 million households. The remaining 50% of households are Marginal: Households with annual incomes of less than $50K—65 million households.

Assets and Liabilities by Market Class

Although the Middle Market's average amounts of total assets and net worth are less than the average for the Affluent and Wealthy, the aggregate amount of the Middle Market's financial assets and investable assets is equal to that of the Affluent and Wealthy. The Middle Market's incidence of ownership and average amounts of retirement and investment products (such as annuities, stock or bond mutual funds, IRAs, SEPs, and Simples) are above average for all households; the incidences and average balances are all lower than those of the Affluent and Wealthy. However, the total aggregate amount that the Middle Market has in these products and accounts exceeds that of Affluent and Wealthy households.

For organizations that want to increase their assets under management, the Middle Market may represent a viable target for many financial-services providers. Concerns about the cost of acquisition, delivery, and service for the Middle Market should also include the intense competition, overcapacity, and continued pressure on margins associated with serving the Affluent and Wealthy. The MacroMonitor ably proves that some Middle-Market households with modest amounts in one or two products may, in fact, have significant holdings in other financial products as part of the household's total financial portfolio.

If this market segment is important to the future of your business:

From their CFD client-landing page, MacroMonitor subscribers may:

  • Access the December 2014 Segment Summary, Middle Market Households.
  • View Quick Stats to find the numbers behind the figure in this newsletter.
  • Schedule a full presentation about these households, including a customized and proprietary Q&A session. Contact us to schedule your presentation.

If you are not a MacroMonitor subscriber but would like more information about Middle-Market households, please contact us for package information and pricing.