By Josh Book

The wealth management industry is in the midst of a digital disruption which is pushing firms to develop or revitalize their digital strategies and think about customers in innovative ways.

There are many ways to assess market opportunity, conduct market research and design business strategies to be sure. Segmenting the investing population behaviorally – also known as, attitudinal segmentation – allows for finer analysis of consumers which is valuable during opportunity assessment or ongoing product management. To be successful in execution, firms must most appropriately reach and engage their target consumers. Understanding what those consumers are like relative to the offer being deployed is a critical first step.

Partly illustrated in the image below, the “Slam Dunk Digitals” segment from ParameterInsights’ Digital Wealth Research are, for example, very comfortable making financial transactions online; greatly prefer accessing financial information online; prefer investing over saving; consider themselves long- term investors; are confident about retirement; not worried about financial future; not confused by wealth management products and services and don't see wealth management offers as all the same. Simply, these investors cluster favourably relative to digital wealth advice offers.  

Dissecting the attitudinally optimal consumer segment(s) to understand their ages, asset and income levels, etc. helps firms to be more and more targeted in their marketing, design and iteration of product and service models to groups of people already behaviourally ripe for category consumption. Managers can now size a market more appropriately, create targeted messaging and use most appropriate mediums to reach sub-segments within the behaviorally optimal groups.    

Our consumer survey data comprises representative samples of consumers in Canada and the US. Cluster analysis of the data reveals four distinct attitudinal consumer segments within each market. We’ve identified one primary and one secondary target segment for each country, Canada and the US. As illustrated above, these target attitudinal segments cluster very nicely around specific mixes of variables which we’ve deemed to most support consumption of wealth management services digitally.

Slam Dunk Digitals and Engaged Asset Accumulators

High-appeal attitudinal segments comprise more than half the North American investor market. That is, over half of the US and Canadian market are behaviorally attractive targets for digitally-led wealth management service offers. While these segments share commonalities related to how they think about relevant variables, there are still demographic differences within the attitudinal segments that are useful to study.

It is useful to know details about high appeal segments. For instance, that the Slam Dunk Digitals in Canada are made up of more men than women (60% vs. 40%) or that nearly half of them have investable assets greater than $100,000. In the US, Engaged Asset Accumulators skew even more male than female (64% vs. 36%) and have similar investable assets to the Slam Dunk Digitals.

Diving deep to understand everything about high attitudinally appealing target segments can help managers make better choices around investment, product design, consumer outreach and engagement.

To learn more about our data and research please start a conversation with us.