Introducing Forrester's Financial Services First Look

Welcome to Financial Services First Look, a newsletter highlighting our recent research about consumer banking, brokerage, and insurance. This month, I feature slices of our work on the affluent and their advisors. In the coming months, I'll highlight our latest banking and cross-selling research. Hankering for something else? Tell me what's on your mind by replying to this email.

Stalking the Elusive North American Millionaire

"Eat the rich," satirist P.J. O'Rourke advises -- and financial firms try mightily to comply. But with a million fewer affluent households than there were three years ago, the hunt for the North American millionaire has never been more intense.

Fortunately, Forrester has a clear bead on them. Most, for example, consider a brokerage house their primary financial provider. How do they come to depend on that firm? The top answer by far is: "I've done business with it the longest." The lesson: To become millionaires' primary provider, you've got to land them early, like Schwab did with the boomers and ETRADE did with Gen Xers.

But the trick is finding tomorrow's affluent today. We dove into our data to unearth those traits that can predict who'll be a millionaire next.

Sure, the next millionaires earn big incomes. And many -- especially Canadian millionaires -- operate a business. But there are unexpected traits as well. Millionaires are:

Financial advisors understand that client involvement and technology are vital to their success. Of the 2,200 advisors we surveyed for our report " Which Advisors Use Technology," 90% say that their clients want online account access. Nearly as many think that they serve their clients better if they use technology.

But how well do advisors understand their clients? Eighty-nine percent believe that they are more technologically proficient than their clients. That number flies in the face of our data, which shows that more investors than advisors are technology optimists -- 66% versus 57%. The gap is even wider among next millionaires, 71% of whom are technology optimists.

Our take? To get more out of their tech spend, firms need a better guide to the technology attitudes of the advisors they hire and train. Forrester's segmentation of advisors shows that low-producing technology optimists, for example, are light users of portfolio management systems but the biggest users of third-party mutual fund and annuity sites.

Look for more research into the technology behaviors of advisors and agents in the coming months. We'll also be analyzing banks' technology priorities and cross-selling strategies. View a list of some upcoming titles on the Financial Services page of forrester.com. Let me know what other topics you'd like to see covered in the coming months.


Bill Doyle
Financial Services Research Director

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