Drivers of Share of Wallet
The Primacy Premium and the Connection to Retirement Advice
Order Report - Drivers of Share of Wallet: The Primacy Premium and the Connection to Retirement Advice
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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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
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1.4: Exhibit 1.4 — Average Number of Saving & Investing Relationships: by Investable Assets, by Years
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1.5: Exhibit 1.5 – Number of Saving, Investing & Advice Store Relationships: by Investable Assets, 2020
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1.6: Exhibit 1.6 – Average Share of Wallet: by Investable Assets, 2020
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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
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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
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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*
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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
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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
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2.5: Exhibit 2.5 – Sources for Investment Information & Advice – Reliance on Myself: National, by Year
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2.6: Exhibit 2.6 – Sources for Investment Information & Advice – Reliance on Myself: by Investable Assets, 2020
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2.7: Exhibit 2.7 – Sources of Investment Information & Advice, Myself: by Generation, by Investable Assets, 2020
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2.8: Exhibit 2.8 – Sources for Investment Information & Advice – Reliance on Myself: by Store, 2020
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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
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3.3: Exhibit 3.3 – Decision Tree Analysis Predicted Share of Wallet, Model 2*: Splits for Investable Assets $375K+, Column Visualization
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3.4: Exhibit 3.4 – Predicted Share of Wallet for Decision Tree Model 2*: Investable Assets $25K-<$375K
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3.5: Exhibit 3.5 – Predicted Share of Wallet for Decision Tree Model 2*: Investable Assets <$25K
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3.6: Exhibit 3.6 – Trust by Investable Assets: 2020
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3.7: Exhibit 3.7 – Trust by Store: All Customer Types, 2020
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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
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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
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4.5: Exhibit 4.5 —Comparison of Average Share of Wallet When Firm Serves as Main Source of Retirement Advice: All Customer Types, 2020
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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
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5.3: Exhibit 5.3 – MSRA Household Profile by Household Income: National, 2020
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5.4: Exhibit 5.4 – MSRA Household Profile by Lifestage: National, 2020
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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
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5.6: Exhibit 5.6 – Crosstab of Main Source of Retirement Advice by Consumer-Reported Position of Relationships by Inside Advice® Categories
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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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