Overview 1
Catalyst 1
Summary 1
Executive Summary 2
Financial institutions must use their website to convey their brand and image as well as product and service offerings to mass affluent clients 2
The mass affluent population in the UK is growing, although there will be some slow down in the rate of growth over the next five years 2
Banks and portfolio management companies differ a great deal in terms of the actual services they offer and how well they present their company on their website 2
TABLE OF CONTENTS 3
Table of figures 4
Table of tables 5
SPECIAL FEATURE: WEBSITES ON THE FRONTLINE 6
Websites are more than a marketing tool, they are indispensable product and service features of financial institutions 6
Retail banks in the UK need to increase their deposit base and the lucrative mass affluent market is a valuable one 6
Websites offer the opportunity to promote the company, provide a wide range of information, and enable clients to perform banking transactions 6
Websites are a key mechanism for banks and investment houses to serve the mass affluent market 8
The mass affluent use the internet for financial research and undertaking banking transactions 8
The mass affluent use the internet to research for the best product or service at the best price 8
Price comparison websites are enormously increasing the ease with which consumers can compare financial products in order to get the best available 9
The mass affluent use the internet to undertake financial transactions 9
The internet can quickly bring customers to a bank, but just as quickly lead them away 11
Customers are becoming increasingly sophisticated and want more than 'price' 11
The key features of a good website 11
Aesthetics - because first impressions count 12
Originality - because mass affluent people like to stand out from the crowd 13
Innovative example: Citi maintains the same navigational structure for its mass affluent offering but 'brands it gold' 14
Innovative example: HSBC presents paperless statements in a highly original way, turning online statements into a virtual forest 15
An intuitive navigational structure is a key to clients fully exploring the site 16
Web accessibility and disability issues must be treated seriously by banks 17
Some UK banks are not faring well with enhancing website accessibility 18
Greater direct marketing of their full range of products and services could improve the position of banking and investment institutions 18
Direct marketing goes straight to the consumer and has traceable, measurable results 18
Better mass affluent banking means building personal relationships with clients in a technological age 19
Innovative example: The BNZ uses text messages and email alerts to keep in touch with clients 19
UK MASS AFFLUENTS ARE A LARGE MARKET SEGMENT 21
There were 8.4 million mass affluent individuals in the UK in 2007 21
There has been a fall off in the overall number of mass affluent individuals in 2007, after good growth between 2003 and 2006 21
UK Mass affluents lost £20 billion in onshore liquid assets in 2007 22
Mass affluent assets are concentrated in the £100k-200k asset classes 24
The mass affluent population will not recover until 2010 26
2008-9 will be characterized by struggling economies worldwide 26
The mass affluent population will decline over 2007 to 2010 26
Mass affluent liquid assets will continue to decline until 2010 28
THERE ARE 14 CRITICAL BENCHMARKS FOR MASS AFFLUENT SERVICES 30
The internet is increasingly the preferred means for researching financial products and services 30
Datamonitor reviewed the mass affluent website offerings of 22 UK financial service institutions 32
Good customer acquisition involves clarity and strong referral mechanisms 33
Criteria 1: Clearly stated threshold 33
Banks tend to be better at clearly stating the criteria for their service offerings 34
Criteria 2: Multiple threshold measures 34
Several companies exhibit clearly set out, comprehensive, flexible threshold structures 34
Criteria 3: Client goal assessment 35
Criteria 4: Strong internal referral system 36
Criteria 5: IFA services 37
Independent Financial Advisors dominate the provision of investment products and financial advice 37
A strong distribution system requires access to a dedicated financial partner 40
Criteria 6: Dedicated 24 hour call centre 40
Criteria 7: Dedicated website with client log on 41
Criteria 8: Clearly laid out website 42
Criteria 9: Dedicated branches/offices (relevant only for banks) 42
Criteria 10: Named relationship manager(s) 43
Specialist strengths must include holistic and specialist services 43
Criteria 11: Coverage of all important product/service areas 43
Criteria 12: Availability of international services 46
Criteria 13: Specialist staff in major product areas 47
Pricing has to be clear 47
Criteria 14: Clearly disclosed pricing 47
The TCF initiative aims to create a more efficient and effective market 47
TCF will help investors be better informed about the price structures associated with bank products and services 48
APPENDIX 49
Definitions 49
Adult population 49
Onshore liquid assets 49
The drivers of growth in the wealthy population 49
Income growth (combined with inflation, changes in GDP by sector, household savings rates and debt levels) 49
Investment returns (market capitalization, interest rates and bond yields) 49
The following measures are not, in themselves, drivers of wealthy population growth 50
Market capitalization 50
GDP 50
The following measures are not drivers of wealthy population growth except under very restricted circumstances 50
Primary residence value growth 50
Inheritance 50
Methodology 50
Global Wealth Model 50
The UK sub model 51
Bibliography 51
Further reading 51
Ask the analyst 51
Datamonitor consulting 51
Disclaimer 51
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