The Affluent Market in Australia

Introduction

The affluent consumer market living in Australia provides an attractive market for financial institutions to target because of the wealth they hold. Datamonitor's Australia Financial Services Survey captures opinion from 406 affluent individuals.

Scope

• Details who wealthy consumers consider to be their main financial provider, and associated branding attributes of banks.
• Discusses affluent product trends for credit cards and HISA including number of accounts, which provider they are with and why they were selected.
• Analyses how affluent Australians plan to fund their retirement and the use of financial planners.

Highlights

The majority of wealthy respondents said they would only buy financial products from an established provider. This is good news for the leading providers with a long history in the market as their brands are likely to be more appealing to customers who look for safety and security from a bank.

While leveraging existing relationships should boost HISA numbers, offering a better rate is likely to be the biggest determinate for attracting completely new clients and should be the focus for providers trying to break into the market.

Wealthy consumers are likely to have more credit cards because of their financial position and lifestyle. These individuals typically have high incomes that allow them to pay off their monthly repayments and maintain a high standard of living.

Reasons to Purchase

• Review how wealthy individuals view your brand and which banks lead the market in the consumers eye.
• Identify affluent product trends including what factors influenced them to select their main account provider.
• Learn what improvements wealthy individuals would like to see from financial planners.

• Overview
  • Catalyst
  • Summary
  • Methodology
• Executive Summary
  • Most of Australia's wealthiest clients prefer to deal with well-known Australian banks
  • The vast majority of wealthy respondents consider an Australian bank to be their main financial provider
  • HISAs are very much a part of the affluent market's investment portfolio
  • around half of wealthy respondents with a HISA have an online-only account
  • around half of wealthy respondents have more than one credit card
  • Most wealthy clients selected their main credit card provider because they held a transaction account there or based the choice on the rewards program on offer
  • More wealthy Australians are banking on their own investment skills rather than turning to a financial planner
  • Wealthy individuals are likely to select their financial planner based on the perception of advice quality and recommendations from family and friends
  • The majority of wealthy respondents are happy with their current financial planning arrangement
  • Table of figures
  • Table of tables
  • Financial Provider Trends
  • Most of Australia's wealthiest clients prefer to deal with well-known Australian banks
  • Wealthy Australians want a financial provider that they know and trust
  • The vast majority of wealthy respondents consider Australian banks to be their main financial provider
  • The CBA brand is highly regarded by the wealthy Australian sample
  • High Interest Savings Account Trends
  • HISAs are very much a part of the affluent market's investment portfolio
  • More than one in five wealthy Australians have multiple HISAs
  • The usual suspects hold the leading positions in the HISA market
  • Most wealthy individuals selected their HISA provider based on the interest rate or because they already held a transaction account with the bank
  • around half of wealthy respondents with a HISA have an online-only account
  • Advisors from the bank helped wealthy individuals learn about HISAs
  • Most wealthy clients have not switched their HISA over the last year
  • as expected, most HISA switchers moved for a better interest rate on their money
  • Most wealthy clients are happy with their current HISA provider
  • Credit Card Trends
  • Wealthy individuals are heavily influenced by the rewards program of a credit card
  • around half of wealthy respondents have more than one credit card
  • Visa branded credit cards are the most popular for wealthy Australians
  • The majority of wealthy individuals hold their main credit card with one of the big four banks
  • Most wealthy clients selected their main credit card provider because they already held a transaction account there or based their choice on the rewards program on offer
  • Most affluent card holders have a credit card that offers rewards on their purchases
  • Wealthy individuals are most likely to switch to a new card provider if they charge no fees and offer the same credit card features
  • Investment planning Trends
  • Most wealthy individuals are managing their own investments without the aid of a financial planner
  • The majority of affluent respondents plan to fund their retirement from superannuation, although HNWs are more likely to use investment property as their source of retirement income
  • More wealthy Australians are relying on their own investment skills rather than turning to a financial planner
  • Wealthy individuals are likely to select their financial planner based on the perception of advice quality and recommendations from family and friends
  • While around one in five wealthy respondents were completely happy with their planner, there were plenty of suggestions for improvement from the rest
  • The majority of wealthy respondents are happy with their current financial planning arrangement
• Appendix
  • Data
  • Definitions
  • Affluent market
  • High net worth market
  • Wealthy respondents
  • Onshore
  • Methodology
  • Further reading
  • Ask the analyst
  • Datamonitor consulting
  • Disclaimer
• List of Tables
  • Table 1: Financial provider trends
  • Table 2: What do you consider to be your main financial institution?
  • Table 3: from the following financial institutions please select the one you think are the strongest in the following areas
  • Table 4: from the following financial institutions please select the one you think are the strongest in the following areas
  • Table 5: How many high interest savings accounts do you have?
  • Table 6: Who do you have your main high interest savings account with?
  • Table 7: Why did you choose this provider?
  • Table 8: What type of account is your main high interest savings account?
  • Table 9: What sources of information did you use when choosing your provider of main high interest saving account?
  • Table 10: Have you switched your main high interest savings account in the last 12 months?
  • Table 11: Why did you switch your main high interest savings account provider?
  • Table 12: Why didn't you switch your main high interest savings account provider?
  • Table 13: How many credit cards do you have?
  • Table 14: What brand is your main (most commonly used) credit card?
  • Table 15: Who do you hold your main credit card with?
  • Table 16: Why did you choose your provider?
  • Table 17: What features does your main credit card have?
  • Table 18: How likely would you be to switch your main card provider for the following reasons?
  • Table 19: How are you looking to fund your retirement?
  • Table 20: Who do you have as your main financial planner?
  • Table 21: Why did you choose your financial planner?
  • Table 22: What improvements could your financial planner make regarding service?
  • Table 23: Have you switched your main financial planner in the last 12 months?
• List of Figures
  • Figure 1: Most wealthy respondents would prefer to deposit their money in an Australian bank rather than a foreign provider
  • Figure 2: CBA stood out from the pack as the main financial provider for wealthy individuals
  • Figure 3: More affluent respondents perceive CBA as a secure, professional and approachable bank than any other provider in the market
  • Figure 4: HNW respondents believe CBA is the strongest overall player in the market followed by Westpac
  • Figure 5: The majority of wealthy Australian respondents have at least one HISA
  • Figure 6: CBA has emerged as the provider with the largest HISA market share
  • Figure 7: Wealthy individuals are heavily influenced by the interest rate they receive on their HISA
  • Figure 8: The online-only account is the most common product in the HISA market
  • Figure 9: Wealthy individuals turn to financial advisors and family and friends for information about HISA providers
  • Figure 10: One in 10 affluent respondents switched their main HISA in the previous 12-month period
  • Figure 11: Many of the wealthy individuals that switched their HISA provider in the last year chased a higher rate
  • Figure 12: around one in five HNWs did not switch providers because of the inconvenience involved
  • Figure 13: IT is not uncommon for wealthy individuals to have multiple credit cards
  • Figure 14: around one in 10 wealthy individuals use an American Express branded credit card
  • Figure 15: in most cases, HNWs were more likely than affluent respondents to have a foreign bank as their main credit card provider
  • Figure 16: Having a premium branded card was ranked relatively low
  • Figure 17: A quarter of affluent respondents have a premium branded card
  • Figure 18: Wealthy clients would consider switching providers for less fees and more rewards
  • Figure 19: More HNWs are planning to fund their retirement from investment property than through superannuation
  • Figure 20: Most wealthy individuals are self-managing their investments rather than employing the services of a financial planner
  • Figure 21: HNWs are heavily influenced by family and friends when selecting a financial planner
  • Figure 22: HNWs want more face to face contact with their financial planner
  • Figure 23: Wealthy respondents do not intend to switch financial planners in the coming 12 months