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Drivers of Share of Wallet

The Primacy Premium and the Connection to Retirement Advice






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Report Overview

Capturing more of your customers' investable assets is often easier and less expensive than acquiring new customers. This report explores the drivers of "share of wallet" (SOW) and which customers are most likely to express their loyalty by doing more business with you. The bottom line - investor trust, understanding how a firm makes money, being the main source of retirement advice, and serving as a "primary" store, all influence a customers decision to invest more. We also report on which firms have the highest share of wallet and what is the benchmark.

Key Findings

  • The average share of wallet at primary stores spiked to 79% during COVID.
  • The asset breakpoint which best predicts share of wallet is $375K. Wealthier households keep lower SOW at their stores; self-direction further decreases predicted SOW in wealthier households.
  • Trust, understanding how a firm earns money, and investor attitude towards former employer-sponsored retirement plans (ESRPs) are predictive of SOW.
  • The biggest driver of share of wallet is being the main source of retirement advice (MSRA), dwarfing all other factors.
  • The ~24M households with no MSRA may be difficult target. Consider offering customers and prospects who's MSRA is a competitor, something better or different

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Choose access licenses for your team or organization in ways that support how you collaborate. AVAILABLE FOR LICENSE TO NON TRENDS SUBSCRIBERS OCTOBER 13, 2021.

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Sample Report Pages

Table of Contents

Methodology

1-3

Key Findings & Implications

4

Favorite Statistics

5

Related Research

6

Key Findings

7-48

Key Finding #1: The premium for being the primary store is up +14 ppts since 2010. Average share of wallet at primary stores spiked to 79% during COVID.

1.1: Exhibit 1.1 – Average Share of Wallet: National, by Year

7

1.2: Exhibit 1.2 – Percentage of Households Holding 75%+ Share of Wallet at Primary Store: National, by Year

8

1.3: Exhibit 1.3 — Average Share of Wallet Held at Primary Store: by Investable Assets, by Year

9

1.4: Exhibit 1.4 — Average Number of Saving & Investing Relationships: by Investable Assets, by Years

10

1.5: Exhibit 1.5 – Number of Saving, Investing & Advice Store Relationships: by Investable Assets, 2020

11

1.6: Exhibit 1.6 – Average Share of Wallet: by Investable Assets, 2020

12

1.7: Exhibit 1.7 – Percent of Households Who Have a Primary Store Relationship and Average Share of Wallet at Primary Stores: by Investable Assets, 2020

13

1.8: Exhibit 1.8 – Percent of Households Who Have a Secondary Store Relationship and Average Share of Wallet at Secondary Stores: by Investable Assets, 2020

14

1.9: Exhibit 1.9 – Percent of Households Who Have a Third Store Relationship and Average Share of Wallet at Third Stores: by Investable Assets, 2020

15

Key Finding #2: The asset breakpoint which best predicts share of wallet is $375K. Wealthier households keep lower SOW at all of their stores, and self-direction further decreases predicted SOW in wealthier households.

2.1: Exhibit 2.1 – Decision Tree Analysis Predicted Share of Wallet, Model 1*

16

2.2: Exhibit 2.2 – Decision Tree Analysis Predicted Share of Wallet, Model 1*: All Splits, Column Visualization

17

2.3: Exhibit 2.3 – Sources for Investment Information and Advice – Reliance: National, 2020

18

2.4: Exhibit 2.4 – Number of Saving & Investing Relationships by Sources for Investment Information & Advice – Reliance on Myself: Households With $375K+ Investable Assets, 2020

19

2.5: Exhibit 2.5 – Sources for Investment Information & Advice – Reliance on Myself: National, by Year

20

2.6: Exhibit 2.6 – Sources for Investment Information & Advice – Reliance on Myself: by Investable Assets, 2020

21

2.7: Exhibit 2.7 – Sources of Investment Information & Advice, Myself: by Generation, by Investable Assets, 2020

22

2.8: Exhibit 2.8 – Sources for Investment Information & Advice – Reliance on Myself: by Store, 2020

23

2.9: Exhibit 2.9 – Scatterplot Analysis: Average Share of Wallet by Sources for Investment Information & Advice – Reliance on Myself, “Never”: 2020

24

Key Finding #3: Beyond assets, trust and “understanding how a firm earns money” are both predictive of SOW, and reveal that attitude to former employer-sponsored retirement plans (ESRPs) also affects SOW.

3.1: Exhibit 3.1 – Decision Tree Analysis Predicted Share of Wallet, Model 2*

25

3.2: Exhibit 3.2 – Decision Tree Analysis Predicted Share of Wallet, Model 2*: Investable Assets Splits

26

3.3: Exhibit 3.3 – Decision Tree Analysis Predicted Share of Wallet, Model 2*: Splits for Investable Assets $375K+, Column Visualization

27

3.4: Exhibit 3.4 – Predicted Share of Wallet for Decision Tree Model 2*: Investable Assets $25K-<$375K

28

3.5: Exhibit 3.5 – Predicted Share of Wallet for Decision Tree Model 2*: Investable Assets <$25K

29

3.6: Exhibit 3.6 – Trust by Investable Assets: 2020

30

3.7: Exhibit 3.7 – Trust by Store: All Customer Types, 2020

31

3.8: Exhibit 3.8 – Attitude of “I am comfortable leaving money in a retirement plan sponsored by a company where I no longer work” by Levels of Agreement on 10-Point Scale: National, by Year

32

Key Finding #4: The biggest driver of share of wallet by far is being the main source of retirement advice (MSRA), dwarfing all other factors.

4.1: Exhibit 4.1 – Predicted Share of Wallet for Decision Tree Model 3*: First Split

33

4.2: Exhibit 4.2 – Predicted Share of Wallet for Decision Tree Model 3*: Main Source of Retirement Advice, 2020

34

4.3: Exhibit 4.3 – Predicted Share of Wallet for Decision Tree Model 3*: Not Main Source of Retirement Advice, 2020

35

4.4: Exhibit 4.4 —Serve as Main Source of Retirement Advice: All Customer Types, 2020

36

4.5: Exhibit 4.5 —Comparison of Average Share of Wallet When Firm Serves as Main Source of Retirement Advice: All Customer Types, 2020

37

Key Finding #5: Nearly 24M households do not have an MSRA but are a difficult target. A smarter choice may be to offer prospects and your customers, who have a current MSRA with another firm, something better or different.

5.1: Exhibit 5.1 – Market Sizing of Households with and without MSRA: 2020

38

5.2: Exhibit 5.2 – MSRA Household Profile by Investable Assets: National, 2020

39

5.3: Exhibit 5.3 – MSRA Household Profile by Household Income: National, 2020

40

5.4: Exhibit 5.4 – MSRA Household Profile by Lifestage: National, 2020

41

5.5: Exhibit 5.5 – Importance of Want from Firm, “Offers Retirement Planning” Among Respondents Who Do Not Have a Main Source of Retirement Advice: by Lifestage, 2020

42

5.6: Exhibit 5.6 – Crosstab of Main Source of Retirement Advice by Consumer-Reported Position of Relationships by Inside Advice® Categories

43

5.7: Exhibit 5.7 – Attitude “I see value in paying for professional financial advice, whether or not I use a financial advisor today”: by Lifestage, by MSRA, 2020

44

5.8: Exhibit 5.8 – Percentage of Customers Considering Each Store their MSRA: All Customer Account Types, by Year

45

5.9: Exhibit 5.9 – Satisfaction with Want from Firm “Offers Retirement Planning”: All Customer Types, 2020

46

5.10: Exhibit 5.10 – Consumer Perception on Inside Advice® Grid by Store: All Customer Types, 2020

47

5.11: Exhibit 5.11 – Selected Benchmarks from Inside Advice® Benchmarking

48

Data Dictionary

49-55

Appendix

56

Glossary

57
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Hearts & Wallets reports and research are for internal use only. Reports, wording of survey questions, structure of fields and data points are the property of Hearts & Wallets and are protected by copyright. Access to them is provided to you for internal strategic use only, and they cannot be used outside of your company without written consent from Hearts & Wallets LLC. Please contact Client Success to add more users for internal strategic access or to inquire about flexible options for licensing content for external use.

By clicking “I Agree”, you agree to our terms of use and that you have read our privacy policy.

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