VALS™ Industry Report: Financial Services September 2008

About This Report

Have less: The high cost of essentials, decreased home values, and stock market volatility are causing the majority of U.S. households to rethink their spending, investing, savings, and retirement strategies.

Household impact: Financial conditions in the past several years have not benefitted the majority of U.S. consumer households.

Help may not be on the horizon: Financial institutions face an economy that will take several years to bounce back. Facing the possibility of increased government oversight, their need to understand the consumer has never been greater.

The current state of the economy is on many consumers' minds. The housing crisis, rising consumer prices, stagnating income, and stock market losses continue to feed a media frenzy about a bear market and U.S. recession. In spite of economic-stimulus checks, rising consumer prices and the country's soaring national deficit have made the U.S. economy a top voter concern in the 2008 presidential election. July was a particularly stressful month, because each week saw reports of more bad financial news, including alleged underfunding of mortgage mainstays Fanny Mae and Freddy Mac, the collapse of IndyMac Bank-a large California mortgage lender, confirmation of a bear market, and most recently, inflation fears.

After several decades of merger-and-acquisition activity and scandal, retail financial institutions-banks, mortgage companies, investment and insurance companies, stockbrokerage firms-face ever-growing pressure to increase shareholder value in a consumer marketplace more cynical than it has been in recent years and with less financial wiggle room. Many of the current industry challenges are not new but a continuation of conditions present at the turn of the twenty-first century: Many institutions continue to wrestle with these issues. The current housing crisis has precipitated the same market condition that the dot-com era contributed to in the late 1990s: an economic boom turned bust for investors. Unlike the earlier economic downturn, however, present market conditions affect all Americans because the rising costs of essentials (food and fuel) are not limited to individuals or households with stock market exposure.

Table of Contents

Wall Street and Main Street 1
All U.S. Households 4
Financial Position and Product Use 6
Internet Impact 8
Innovators 12
Financial Position and Product Use 12
Perceptions of Financial Institutions 13
Implications 14
Thinkers 17
Financial Position and Product Use 17
Perceptions of Financial Institutions 18
Implications 19
Believers 22
Financial Position and Product Use 22
Perceptions of Financial Institutions 23
Implications 24
Achievers 27
Financial Position and Product Use 27
Perceptions of Financial Institutions 28
Implications 29
Strivers 32
Financial Position and Product Use 32
Perceptions of Financial Institutions 33
Implications 34
Experiencers 36
Financial Position and Product Use 36
Perceptions of Financial Institutions 37
Implications 38
Makers 41
Financial Position and Product Use 41
Perceptions of Financial Institutions 42
Implications 43
Survivors 46
Financial Position and Product Use 46
Perceptions of Financial Institutions 47
Implications 48
Tables
The Economy and My Financial Situation: All U.S. Households 4
General Financial Attitudes: All U.S. Households 5
Internet Access and Use, 2007 9
Information, Advice, and Channel Preference 10
Balance Sheet: All U.S. Households 11
The Economy and My Financial Situation: Innovators 12
Innovators' Balance Sheet 16
The Economy and My Financial Situation: Thinkers 17
Thinkers' Balance Sheet 21
The Economy and My Financial Situation: Believers 22
Believers' Balance Sheet 26
The Economy and My Financial Situation: Achievers 27
Achievers' Balance Sheet 31
The Economy and My Financial Situation: Strivers 32
Strivers' Balance Sheet 35
The Economy and My Financial Situation: Experiencers 36
Experiencers' Balance Sheet 40
The Economy and My Financial Situation: Makers 41
Makers' Balance Sheet 45
The Economy and My Financial Situation: Survivors 46
Survivors' Balance Sheet 50
Summary Balance Sheet of U.S. Households: Innovators and Survivors 51
Summary Balance Sheet of U.S. Households: Ideals Motivation-Thinkers and Believers 52
Summary Balance Sheet of U.S. Households: Achievement Motivation-Achievers and Strivers 53
Summary Balance Sheet of U.S. Households: Self-Expression Motivation-Experiencers and Makers 54
All U.S. Households 54
Figures
VALS™ Diagram 3
Cultural Reference Dimension of Financial-Institution Types 8
Reference Dimensions of Financial Institutions: Innovators 14
Reference Dimensions of Financial Institutions: Thinkers 19
Reference Dimensions of Financial Institutions: Believers 24
Reference Dimensions of Financial Institutions: Achievers 29
Reference Dimensions of Financial Institutions: Strivers 34
Reference Dimensions of Financial Institutions: Experiencers 38
Reference Dimensions of Financial Institutions: Makers 43
Reference Dimensions of Financial Institutions: Survivors 48

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