Advisor Today - March/April 2016 - (Page 17)
By Ayo Mseka
Who's Saving the Most and Why?
A study identifies the best savers in each generation and shows how segmentation can
help advisors serve them better.
oing Beyond Generation
to Understand Younger
Investors: How Adoption of
the Peak Accumulator Behaviors
Leads to More Confident, Loyal and
Profitable Customers is a Hearts
& Wallets segmentation study
that reveals who is accumulating
the most assets, outlines three
behavioral "saver personalities" and
details how the financial-services
industry can help each group
achieve their financial goals.
Although Gen Y steals the
headlines, Gen X is bigger in terms
of households and financial clout,
the survey notes. Gen X includes
37 million households who make
decisions on more than $9 trillion
in investable assets, compared to
nearly 22 million Gen Y households
who control $1.5 trillion. Gen X
also has six times more investable
assets under management than Gen
Hearts & Wallets segments the
best savers within each generation
according to six measures of
financial responsibility that lead
to financial success. These Peak
Accumulators offer insights into
their ability to accumulate wealth,
which can benefit peers and help
the industry advise all three "saver
personalities," the survey notes.
Only 9 percent of Gen Y are
Peak Accumulators, but they
control 20 percent of Gen Y's
investable assets. Likewise, only
13 percent of Gen X are Peak
Accumulators, but these 4.7 million
Gen Y Peak Accumulators control
39 percent of investable assets that
are held by Gen X.
"The increasingly wealthy Gen
X is often 'X-ed' out in favor
of Gen Y and Boomers by the
financial industry," Chris J. Brown,
Hearts & Wallets partner and
over more than five years
of research, are based on
answers to questions about
smart financial behaviors.
co-founder, said. "In particular,
Peak Accumulators save more, have
more assets and are more engaged
in investing. Not only are they ideal
clients, but advisors and firms can
also encourage other clients to adopt
Peak Accumulator behaviors. It's
like teaching someone to fish. These
behaviors create more secure and
self-sufficient households and
Three "saver personalities"
Behavioral "saver personality"
segmentations, developed over more
than five years of Hearts & Wallets
research, are based on answers to
questions about smart financial
behaviors. They are:
* Peak Accumulators. These
are savers who exhibit every
financially responsible behavior
type as identified by Hearts &
Wallets research, which leads to
lasting financial success. These
include "I generally spend less
than I make" and "I have little
or no credit card debt." They
also tend to be very financially
engaged and knowledgeable.
* Coasting Investors. These
savers often have an attitude of
"waiting to be rescued." They
do a reasonably good job of
spending less than they earn,
keeping debt to a minimum and
having an emergency fund, but
have further to go in adopting
behaviors that will lead to lasting
financial success. Only 29 percent
of this Gen Y "saver personality"
own homes outright or with a
mortgage. Little more than half
(55 percent) of Gen X own homes.
* Struggling Savers. Many in this
group live paycheck to paycheck.
They may struggle with credit card
debt, spend more than they make,
or do not have an emergency fund.
For both Gen Y and Gen X, less
than one in five has an emergency
fund. Only 15 percent of Gen Y or
X has an emergency fund and only
46 percent of Gen X contributes
regularly to a retirement
The study notes that being a Peak
Accumulator is more of a mindset
and having a disciplined savings
cont'd on page 18
March/April 2016 | ADVISOR TODAY 17
Table of Contents for the Digital Edition of Advisor Today - March/April 2016
From the Editor
A Question of Ethics The Details Often Make the Difference
What's Ahead for Financial Advising?
Whos's Saving the Most and Why?
Making the Case for Critical Illness Insurance
Are You a Retirement Expert?
Selling the "Best Plan"
Taking Incremental Steps Toward Success
Investment Strategies for Today’s Consumers
How Tax Efficient is Your Investment and Retirement Portfolio?
Ideas for a Profitable Practice
Crossing the Two Client Relationship Bridges
Working with Muslim-American Clients
Attracting and Serving Today's High-Net-Worth Clients
Becoming a Networking Success
Advisor Today - March/April 2016