HENRYs—high earners not rich yet—are in the news because HENRYs represent a concentration of income and wealth that is of great interest to a variety of marketers—in particular, financial-services marketers. We define HENRYs as households with a primary head between the ages of 20 and 70 who is not retired and with total household income between $100,000 and $249,999. No one can predict with certainty which of these households will become rich. Marketers who hope to profit from the success of HENRYs who emerge at the top of the wealth-accumulation ladder should cast the net broadly.

Demographics

• HENRYs' average age is 47; nearly half (46%) have a primary head of household between the ages of 45 and 59.
• HENRYs' average income is $144K; more than one in three (36%) have total annual household incomes of more than $150K.
• HENRY households (63%) are more than twice as likely as non-HENRY households (26%) to hold at least a four-year college degree; 29% hold a master's degree or higher. (Non-HENRY households are households with annual incomes below $100K.)
• Fewer than half of HENRY households have dependent children; nearly one in three have children older than 18 years.
• Only 13% of HENRYs are single-headed households (never married, divorced, or separated).

Products and Services and Financials

• HENRY households are significantly more likely than non-HENRY households to own saving and investment products (assets) such as CDs, money market deposit accounts, mutual funds, stocks, bonds, and IRAs. In particular, HENRYs have 529 education-savings accounts (14%); have a salary-reduction plan—401(k), 403(b), or 457 plan (81%); and own a home (90%). The incidence of business ownership for HENRYs is 15%, in comparison with 11% of non-HENRYs.
• Although 44% of HENRYs place the greatest portion of their savings and investment assets at banking institutions, nearly one in three concentrate their money at a full-service brokerage, mutual fund company, or financial-planning company; 13% have some type of defined-benefit pension plan.
• Almost nine in ten HENRY households report using online banking services, and 36% invest online.
• Roughly three-quarters of HENRY households hold a first mortgage. About one-half have a vehicle loan; 61% carry credit-card balances. The average HENRY household has more than $220K in total liabilities.
• Statistically, all HENRYs own insurance products. Specifically, 91% own vehicle insurance, 97% own homeowner's or renter's insurance, 95% own health insurance, and 50% own individual life insurance.

Retirement

• Over half of HENRY households name retirement as their most important saving and investing goal.
• Two in five HENRYs are not preparing for retirement.
• HENRYs' top-four areas of retirement focus are to manage assets (33%), to live within a fixed income (32%), to handle health issues (14%), and to put affairs in order (11%).

Financial Planning and Advice

• The majority of HENRY households have a financial strategy; 13% do not.
• HENRY households are very confident in their financial responsibilities—38% indicate that they are "extremely" or "very" confident.
• Still, just 15% of Henry households say they have a written financial plan based on professional advice.

Financial Attitudes That Differentiate HENRY

HENRYs are much more likely than non-HENRYs to:

• Favor technology, embrace investment risk, value and trust advisors
• Consider themselves sophisticated and informed and express financial attitudes suggesting that they are satisfied and confident
• Express a desire to consolidate and simplify their finances.

Implications

HENRYs wield a disproportionate share of influence on the future of the US economy and the financial-services industry. The growth in the number of HENRY households is driving their influence. The 21.5 million HENRY households constitute 22% of the not-yet-retired 20- to 70-year-old population and 17% of all households. Yet they control 61% of the financial assets in the not-retired 20- to 70-year-old group and 31% of total financial assets in the United States—a whopping $8.3 trillion—and have annual income totaling $3.1 trillion.

The evolution of technology and the increasing availability of financial information through an expanding number of media channels represent a significant challenge for every financial-services provider. Perhaps a majority of HENRYs that ultimately achieve financial wealth—income and assets—will be those that formulate and articulate specific goals and strategies to achieve them. This group will yield a premium to the firms that build relationships with and capture the business of these consumers.

For more information, contact CFD.