Preview of Consumer Investing How do BankS and Credit UnionS fit?

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1 Providing Financial Data For Over 20 Years WHERE TO INVEST? Preview of Consumer Investing How do BankS and Credit UnionS fit? 2014 RateWatch Sales and Service:

2 Contents Introduction... 4 Consumer Investing 1. What type of financial advisor do you use for investing? Results Total Respondents... 6 Results By Gender, Age and Income Which services do you utilize at your bank or credit union? Results Total Respondents... 8 Results By Gender, Age and Income Which products make up your investment portfolio? Results Total Respondents Results By Gender, Age and Income What type of investor are you? Results Total Respondents, Gender, Age and Income How would you describe your risk when it comes to investing? Results Total Respondents Results By Gender, Age and Income If you were to begin/increase your investing where would you be most likely to go? Results Total Respondents Results By Gender, Age and Income Why would you be more likely to invest at the location you chose in question six? Results Total Respondents Results By Gender, Age and Income Where do you or would you find information about investments? Results Total Respondents Results By Gender, Age and Income Please rank the following in order of how you would prefer to learn about what services your bank or credit union offers. Results Total Respondents Results By Gender, Age and Income What would encourage you to meet with someone in your bank or credit union's investment department? Results Total Respondents...37 Results By Gender, Age and Income Which of the following would MOST encourage you to meet with someone in your bank or credit union's investment department? Results Total Respondents Results By Gender, Age and Income Please rate the importance that your bank or credit union has a certified financial planner available to meet with. Results Total Respondents, Gender, Age and Income If you were in the market for the following, please rate the likelihood you would purchase each from your bank or credit union vs. another source. Results Total Respondents, Gender, Age and Income Please rate your perception of the cost associated with investing through each of the following. Results Total Respondents, Gender, Age and Income What other services would you like to see offered at your bank or credit union? Results Total Respondents Consumer Investing How do Banks and Credit Unions fit? Page 2

3 Contents Demographics Gender Age Education...54 Income Region...55 RateWatch would like to thank Ron Knaflic, AAMS, and Advisory Board Members: Greg Anderson, Shirley Cate, Tina Nutt and Evette Bertsche for providing valuable input during the survey development process. Consumer Investing How do Banks and Credit Unions fit? Page 3

4 Introduction WHERE DO YOU INVEST? Increase non-interest income. This has been the mantra for many over the last several years. Easy. Increase your fees, right? But now that that s been done, what s next? Many financial institutions are looking outside the box to uncover other products and services that can be offered to their clients to add value, strengthen relationships and bring in additional revenue. Investment programs are now starting to sprout up across the country. For some, this is not a new venture, but the focus has shifted from a department that s nice to have so as not to have to direct a client elsewhere, but a key area adding to the bottom line. RateWatch advisory members recently revealed some key elements to a successful investment program: Sustained, detailed marketing plan make sure customers are aware of diverse offerings and how to reach out Staff buy-in and participation great communication of goals, proper education and valued incentives will help increase traffic and scheduled client meetings Willingness to disseminate funds from the balance sheet to the program as you move dollars internally, you ll likely see new money coming in from other institutions ORDER TODAY!» It is also important to understand who is investing and in what. This survey aims to understand the behaviors and preferences of consumers regarding their current and future investment plans and how the financial institution may be able to play a role. Survey responses were obtained through a third party service with questions distributed July 23 to August 12, 2014 to consumers ages 18 and older throughout the United States. 864 total unique responses were received with 710 having completed the full survey. There is no doubt Americans need to invest for their futures increasing age expectancy and cost of living is driving up retirement age...but many are weary. Millenials have already been through two crashes and older generations have spent years and years of waiting and watching only to lose nearly everything in minutes. They are looking for someone they trust, someone they have built a relationship with, to help them make important financial decisions. Who will they turn to? Will it be you? Consumer Investing How do Banks and Credit Unions fit? Page 4

5 Consumer Investing Consumer Investing How do Banks and Credit Unions fit? Page 5

6 Survey Results Total Respondents, Gender, Age and Income *Respondents who answered question 3, 4 & 5 are investors. *number of respondents are shown in parenthesis Question 4: What type of investor are you? 21.92% No guidance 40.04% Some guidance Total Respondents 38.04% Full guidance By Gender Full guidance (Rely on a professional to help you make financial advisor in a more limited capacity) based on your own research) decisions regarding all aspects of your portfolio) Some guidance (More experienced investor and use a No guidance (You can formulate an investment plan Male (210) 27.62% 44.29% 28.09% 100% Female (278) 42.45% 38.85% 18.70% 100% Females are significantly more likely than their male counterparts to prefer full guidance in their investing decisions, and while males are most likely to seek some guidance, they are much more likely than females to make decisions on their own. By Age yrs (71) 32.39% 40.85% 26.76% 100% yrs (118) 32.20% 37.29% 30.51% 100% yrs (156) 37.82% 44.87% 17.31% 100% >60 yrs (143) 39.16% 40.56% 20.28% 100% By Income $0 - $24,999 (30) 56.67% 23.33% 20.00% 100% $25,000 - $49,999 (73) 36.99% 36.99% 26.02% 100% $50,000 - $99,999 (150) 36.67% 45.33% 18.00% 100% $100,000 - $149,999 (88) 25.00% 46.59% 28.41% 100% $150,000+ (67) 34.33% 41.79% 23.88% 100% Consumer Investing How do Banks and Credit Unions fit? Page 6

7 Survey Results Total Respondents *Respondents who answered question 3, 4 & 5 are investors. Question 5: How would you describe your risk when it comes to investing? 7.43% Aggressive 1.27% Very Aggressive 17.39% Conservative 30.98% Moderately Aggressive 42.93% Moderately Conservative Consumer Investing How do Banks and Credit Unions fit? Page 7

8 Survey Results Total Respondents Question 8: Where do you or would you find information about investments? (Check all that apply) 48% 45% 42% 39% 36% 33% Response percentage 30% 27% 24% 21% 18% 15% 12% 9% 6% 3% 0% Books Financial Coach Online Research Talk radio Investing Seminar/Class Investment Fund Literature Family/Friends 35.35% Newspaper, Magazines 6.20% Subscribe to a paid investing enewsletter 14.57% Subscribe to a free investing enewsletter 4.18% Subscribe to a paid investing website 34.20% Free investing website 14.86% Television (i.e. Jim Cramer, Dave Ramsey) 20.78% 29.29% 37.66% Through work From my Bank or Credit Union advisor From my Investment firm advisor 47.76% Friends and family 6.78% Other Consumer Investing How do Banks and Credit Unions fit? Page 8

9 More Surveys from RateWatch RateWatch conducts surveys of both bankers and consumers across the country to keep up with new and evolving financial industry topics. Surveys are conducted online and responses are compiled into a report format with charts and graphs to easily review the findings. Results are displayed as a whole for all respondents and also broken out into cohort groupings. Visit our Industry Survey webpage to request more information or purchase a previously released survey. $149 Home & Auto Lending: Today's Customer $299 Monetizing Mobile Banking For Small Business Customers What does today's loan customer look like? What do they have for home and auto loans now? How have they managed those loans with refinance options and how much do they still owe? Most importantly, what are they looking for in the near future? In Home & Auto Lending: Today's Customer we aim to understand the behaviors and preferences of consumers regarding their current loans and future loan plans. May, 2014 Do you have a mobile strategy for reaching, maximizing and monetizing your Small Business customers? In Monetizing Mobile Banking For Small Business Customers we identify a four-step framework for defining and pricing winning mobile banking solutions, a breakdown of mobile banking service categories, top features valued in each service category, 6 customer clusters and their typical banking behaviors, suggested service package designs and suggested pricing models. April, 2014 $99 3rd Annual Mobile Banking How financial institutions are incorporating the growing phenomenon of Mobile Banking In 3rd Annual Mobile Banking - How financial institutions are incorporating the growing phenomenon of Mobile Banking we look to understand how financial institutions are offering these services, how their customers are utilizing them and what results have been seen. December, 2013 $149 Banking Through Technology: Consumer Behaviors and Preferences In Banking Through Technology: Consumer Behaviors and Preferences we look at how consumers are banking now and what services they find important. We identify services that are fast becoming common (online banking, mobile banking) to see how consumers are using these and why some are still resistant. We ask how often consumers visit their branches, how they access their cash, what futuristic concepts are they willing to try and are they willing to pay for them? July, 2013 ORDER TODAY!» Consumer Investing How do Banks and Credit Unions fit? Page 9