2024 has certainly been a dynamic and turbulent year, full of uncertainty and promise. While the rate of inflation growth has been tempered, households are feeling the pinch of higher grocery and gas prices, while the Federal Funds rates maintained its highest level since July 2007 until it had its first rate cut in nearly three years in September 2024. The November election represented two different approaches to tackling the U.S. economy, and the majority of voters chose the outcome that led to an optimistic boost in the stock market.
Psympl is dedicated to uncovering deep consumer insights to inform the strategies and marketing efforts of stakeholders in the industries we serve, including the financial services and wealth management industry. To help financial advisors and RIAs (Registered Investment Advisors) understand consumers' attitudes, beliefs, and fears regarding investing and wealth accumulation (and protection), Psympl partnered with Ipsos in August 2024 to conduct a comprehensive study of consumers' approaches to investment and money management. This online study involved n=3,000 respondents mirroring the U.S. Census (i.e., demographically and socioeconomically representative) with a comprehensive survey covering a variety of topics regarding financial investments, the role of financial advisors, and many topics related to wealth management.
One of the questions in the study asked:
Which of the following do you think will have a significant impact (whether positive or negative) on your finances over the next 12 months?
Respondents were offered twenty randomized factors including "other," in which they could type in their own factor. "None of the above" was also offered as a choice:
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US Government/national policies/laws/regulations |
State/Local government policies/laws/regulations |
National politics |
Elections in November 2024 |
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Congressional impasses/disagreements |
Inflation |
Pandemic(s) |
Market volatility |
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Federal debt |
Rising interest rates |
Falling interest rates |
Recession |
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Bull market |
Bear market |
Changes in salary/income |
Healthcare costs |
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Company layoffs/job losses |
Treat of climate change events/natural catastrophe |
War/military actions |
Other (please specify) |
Respondents were asked to rank up to three factors in order of impact. This forced choice method would ensure prioritization.
Across the total base of 3,000 respondents, the top three factors (chosen as the #1 option) perceived to have an impact on personal finances over the next 12 months were:
Note, this survey was conducted months prior to the 2024 elections.
Because no one factor was picked by a majority of respondents, there is not a consensus of expectations among the population about the factor with the biggest impact on their finances. When expanding this analysis by aggregating those options that were chosen in the Top 3 factors, Inflation was chosen by slightly more than half of respondents:
Among the Top 3 Factors:
Still, less than 30% of respondents agreed on the second and third most influential factors impacting their expectations. This illustrates how different people have different perceptions, attitudes, and beliefs, which is why one-size-fits-all approaches to consumer/client engagement do not produce optimal results.
A method for understanding these psychological differences among a population is psychographic segmentation. Psychographics pertain to people's attitudes, values, beliefs, fears, personalities, and lifestyles, which are core to their motivations and priorities. Psychographic segmentation groups people according to these shared characteristics. A primary objective of Psympl's was to identify a psychographic model that explains consumers' decision-making processes and investment behaviors. Psympl identified five distinct psychographic segments for financial services:
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Segment 1 (17%) I'm financially comfortable and I invest, but I'm hands-off with my investments. I want professionals to guide my investments using a safe and predictable approach. |
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Segment 2 (22%) I'm financially secure and actively following the stock market and discussing finances. I favor a more aggressive approach, picking individual stocks myself and am interested in alternative investments like cryptocurrency. |
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Segment 3 (20%) I'm financially secure and confident in my financial standing and retirement. I'm comfortable making my own investment decisions, and prefer a balanced approach to risk, seeking both potential gains and security |
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Segment 4 (25%) I'm living paycheck to paycheck and worried about my retirement. I avoid investing and often carry credit card debt because of my financial situation. |
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Segment 5 (16%) I'm pretty financially secure. I don't invest or trust the stock market but I'm still on track for retirement. My finances aren't complex, so I prefer to just manage them myself. |
Each psychographic segment approaches finances and investments differently. Looking at the Top 3 factors from each segment's point of view, Inflation is still the leading concern among all segments but at varying degrees:
Segments 4 and 5 are the most concerned with Inflation's potential impact on their finances, which makes sense given these segments' lower likelihood of having a financial cushion.
The second most chosen factor differed for Segments 2 and 4::
Segment 1 was statistically more likely (at 95% confidence) than the four other segments to indicate that the Elections in November 2024 would have the second greatest impact on their finances. Segment 2 was statistically most likely (at 95% confidence) to indicate that rising interest rates would have the second greatest impact on their finances.
Recession was the third most likely factor to have a financial impact for most of the segments, but Segment 4 indicated a change in salary/income would round out their Top 3 factors. This leaves 17 other factors with varying degrees of perceived impact across the five segments; understanding these beliefs and fears can help financial advisors address what is important among current and prospective clients.
Each psychographic segment requires unique engagement strategies (i.e., content/message/wording, channel(s), communication frequency) to appeal to them and activate desired behaviors. Psympl Psychographic AITM enables financial advisors to leverage psychographic insights and automated content generation for enhanced client engagement and financial planning.
To find out more about the Psympl Psychographic model and market research, please download our whitepaper, Psychographics in Financial Services and Wealth Management.