MacroMonitor Market Trends Newsletter February 2015

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

From Recession to Recovery: Trends in Seven Key Areas

With the release of the new 2014–15 MacroMonitor data, this Market Trends Newsletter shows trends in seven key areas of financial services.


Social Media

Figure 1: Use of Social Media for Financial Services

The majority of US adults (71%) have visited a social-networking site in the past 30 days (GfK MRI, Fall 2014). A new 2014–15 MacroMonitor measure reports that more than four out of five households report using social media—Facebook, YouTube, Google Plus, LinkedIn, and Twitter, among others—in the past two years. However, for financial services, fewer than one in five households report using social media to gather, share, research, or exchange financial information. Contact Strategic Business Insights' Consumer Financial Decisions (CFD) to learn more about households that use social media for financial services.

Trust

Figure 2: Trust in Financial Institutions and Professionals

The proportion of households that have a great deal of trust in any financial institution continues to decline, even though the economy, stock markets, and consumer confidence have improved. However, trust in financial professionals has increased from two years ago. Contact CFD to learn about how levels of trust differ significantly by different populations such as investors and Millennials.

Retirement

Figure 3: Retirement-Account-Ownership Trend

Retirement accounts have recovered their upward momentum—ownership of IRAs, 401k's, and annuities have increased from 2012. The increases in 401k's may be attributable to Millennials' entering the workforce and automatic 401k enrollment. The uptick in annuities may be the result of Boomers' need for some retirement security. To learn more about serving the total financial needs of Preretired, Retired, and Revolving Retired households, contact CFD.

Investments

Figure 4: Investment-Ownership Trend

For the first time since the Great Recession, household ownership of retail investments is increasing. Led by ownership of stocks and other securities, household penetration of retail mutual funds, money market mutual funds, and treasuries exhibits slight increases. Investment firms and intermediaries need to know if a new investing environment is emerging. Contact CFD to learn more.

Access

Figure 5: Access to Financial Services via Mobile Phones, Debit and Credit Cards, and Online Channels

With the improving economy, the use of debit cards, T&E cards, and online financial services continues to increase. Credit cards and store cards are also doing better than previously. The use of new mobile technology showed an uptick even before the introduction of Apple Pay. ATM-card use continues to decline; ATM-card use will continue to be cannibalized by mobile-device use. New access options are changing the marketplace. CFD provides some answers about the factors driving the change.

Insurance

Figure 6: Insurance-Ownership Trends

Ownership of all major forms of protection except homeowners insurance is increasing. Some of these (somewhat) unexpected directional changes are the result of changing demographics—such as new household and family formation— and the relative value of protection. Contact CFD to learn more about households that have made a recent insurance purchase or intend to do so.

Debt

Figure 7: Credit-Use Trend

Credit use that depends on real estate as collateral (first and second mortgages and HELoCs) is on the decline; real-estate debt remains the "800-pound gorilla" on consumers' balance sheet. At the same time, the increase in the incidence (and amounts) of outstanding debt is striking; the deleveraging of the American consumer appears to be slowing because of increasing confidence and spending.

Summary

Six years after the depth of the 2008–09 recession, signs of recovery are finally sprouting. The majority of household incomes have not, however, reached their inflation-adjusted, prerecession levels. Consumer confidence is well on its way to recovery, with increasing numbers of transactions, financial-product ownership, higher balances of non-equity-based debt, and fresh signs of investing outside retirement accounts. The 2014–15 MacroMonitor reports the US retail financial market is entering a recovery period. Demographic profiles, household balance sheets, and financial attitudes confirm that this recovery is different from those of the last half of the twentieth century. For example, Millennials and Gen Xers have the widest variety of financial needs; Boomers are challenged to prepare for a redefined retirement period that could last 30 years or more. CFD explores the breadth and depth of the MacroMonitor to answer your questions and provide insights about how your institution can plan strategically to meet the changing marketplace successfully.

MacroMonitor sponsors will receive a scheduled full presentation—Insights into the 2014–15 MacroMonitor—including a Q&A session and may request another presentation, customized and proprietary to their institution. On request, sponsors may also obtain information about age cohorts, life stages, and wealth segments of their own definition, as well as other target populations.

To learn more about the MacroMonitor and the many ways in which you may use it throughout your institution, or for any questions, please contact CFD