What Firms Need to Capture the Mass Affluent

Celent researchers propose strategies for advisory firms to win the fight for the mass affluent.

The mass affluent are a segment to be sought by advisers, and these individuals require an altered strategy from the high-net-worth.

According to a recent Celent/Oliver Wyman report, Capturing the Opportunity in the US Mass Affluent Segment, the U.S. mass affluent (defined as a net worth of $250,000 to $2 million) are the most poorly served market, although they command an important field of wealth in this country. The mass affluent segment represent 31% of the total households and 92% of wealthy households, as well as 47% of the total assets in the U.S., according to a release from Celent.

“Amazingly, the opportunity to capture the mass affluent is just as open as it was 20 years ago, when firms started identifying this segment as a target. No firm today has effectively captured the mass affluent,” said Robert J. Ellis, senior vice president of Celent’s Wealth Management Group and co-author of the report.

Recent research from TowerGroup also came to this conclusion: The attention of affluent American has yet to be claimed. TowerGroup honed in on the specific opportunity for advisers in the retirement income space (see Affluent Most In-Demand for Retirement Income Services).

Analysts at Celent suggest firms maintain the following in order to dominate the market of the mass affluent:

  • A strong value proposition that reflects the goals and aspirations of the mass affluent while generating sufficient revenue to serve them profitably.
    A strong brand that resonates with the mass affluent, affirming their status without overreaching by pretending they are interchangeable with high-net-worth and ultra-high-net-worth households.
  • A strong marketing message that speaks to their hopes and fears in a manner that is not condescending, not aimed at a lifestyle or affluence they have not yet achieved, and not lumping them in with the mass market, from whose orbit they have achieved escape.
  • A strong and complete menu of products and services developed solely to meet the needs of these households.
  • Effective delivery channels that serve the mass affluent by respecting their time and providing them with access and information when it is convenient for them, not the financial institution.
  • Development of appropriate technologies to provide a high level of service while recognizing the significantly larger population of the mass affluent segment. An appropriate cost servicing model will leverage technology and delivery channels.