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Written by: Emily Heaton
The financial services industry regulator has identified 10 types of financial consumers in the UK based on distinct characteristics, attitudes and behaviours.
Developed by the Financial Conduct Authority (FCA), the Consumer Spotlight model looks at how we all deal differently with our money and financial services.
Financial services firms can now improve their marketing effectiveness by using the information in the model to identify the most attractive customer groups to focus on.
This information can help firms design products and communications that work well for different, specific consumers.
Let's take a look.
Today's 10 Types of Financial Consumers
The data collected by the FCA shows where each of the customer types look for information about financial services and products.
Knowing where their target customers are actively looking for advice on the financial products and services they sell will help firms market their messages where they are most likely to be seen.
1. Retired with Resources
Mostly retired homeowners with no mortgage, living comfortably on income from pensions and savings.
Risk-averse and careful with their money, this group prefer saving to spending and rarely go overdrawn or take on debt.
They have high savings and a range of financial products.
Optimistic and confident, they tend to be well informed and keep abreast of changes in the economy.
Key Issues
How Firms Can Reach This Group
In general this group would far rather look at information on paper than via a website (69% agree vs. 43% of the total population) so ebooks and fact sheets that can be downloaded and printed are preferred.
That said, smartphone ownership is relatively low (15% vs 49% of the total population) and they are less likely to have internet access (63% vs. 76% of the total population) so traditional marketing methods such as printed media and TV should be used to complement internet marketing activities.
2. Retired on a Budget
The vast majority of this group are over 65. More than half live alone, with 38% widowed and 16% divorced.
They have low incomes, with an even split between home ownership and renting from local authorities.
Members of this group are careful with their money, and tend not to switch providers. They have limited access to information and services and prefer to use cash or cheques to pay bills.
Key Issues
How Firms Can Reach This Group
Accessing information and services is difficult for many.
This is the segment least likely to have access to the internet (39% vs. 81% of the total population) or a computer of any kind (26% have a laptop vs. 66% of the total population).
This group is more likely than others to rely on close family for advice. 21% consulted a close relative (other than their partner) when they last opened a bank or building society account (vs. 5% of the total population).
However, many make decisions on financial products entirely alone (for example, 49% chose home insurance entirely by themselves, vs. 35% of the total population).
Accessing this group via traditional marketing methods such as via printed media, third party promotions and instore displays will be required.
3. Affluent and Ambitious
A high-income, working-age group, with most owning their homes (the majority with a mortgage).
Almost all work full-time, and partners usually work too.
They are highly educated, with half having a degree or equivalent qualification.
They are likely to own several financial products.
Financially confident and likely to shop around, they use the internet as a major source of information.
Key Issues
How Firms Can Reach This Group
This group has high internet use and accesses information from a range of online sources.
This segment has a strong bias towards accessing information and products online.
Almost all have internet access at home (91% vs. 76% of the total population) and most use the internet at least once a day (74% vs. 62% of internet users).
The majority would rather look at information on a company’s website than in a paper leaflet (68% vs. 51% of the total population).
This group is most likely to have high net worth individuals who are still looking to purchase financial products and members are most easily reached via effective digital marketing strategies such as blogging and social media.
4. Mature and Savvy
Largely middle-aged, with higher incomes than average and the vast majority in full-time work.
Mostly homeowners, they generally have higher savings, and have a range of financial products.
They can and will use a number of different sources to research financial products, and make informed decisions.
A secure and optimistic group, they are often confident enough to select suitable products without consulting a financial adviser.
Key issues
How Firms Can Reach This Group
Members of this group are extremely well informed, through a range of digital and traditional channels
86% have internet access at home (vs. 76% of the total population) and the majority use the internet at least once a day.
The majority are happy to access information from companies online, with only 39% preferring to look at a paper leaflet (vs. 43% of the total population).
Accessing information is relatively easy for this segment; the vast majority can use the internet in private without difficulty (82% vs. 77% of the total population) and most find it at least fairly easy to explain a problem and get help from a company over the phone (78% vs. 70% of the total population).
They are more likely to use a wide range of information sources when making decisions about financial products, including price comparison and provider websites, newspapers, bank or building society staff and professional advisers.
Broad digital marketing strategies such as blogging will form an important part of the marketing programme to reach this group.
5. Living for Now
A younger group with lower incomes, with the majority in employment and 15% studying.
Most are able to keep up with bills and expenses, but they tend to be less organised than others.
A fifth have had financial difficulties within the last three years.
They can access and use the internet easily, but are less confident about financial matters. hey are more prepared to take risks, but less likely to take professional financial advice.
Key Issues
How Firms Can Reach This Group
Online and internet-savvy, but less informed than others.
80% have internet access at home (vs. 76% of the total population), with a third saying they use the internet several times a day (vs. 25% of the total population).
Almost 60% have a smartphone, compared to just under half of the total population.
81% say they can easily find what they’re looking for online (vs. 74% of the total population).
They are more likely to use comparison websites (65% used a comparison site the last time they bought home or car insurance, vs. 58% of the total population).
They are more likely than average to be influenced by friends and family, particularly parents, and less likely to take professional advice when taking out products.
For example, only 8% of those deciding what to do with their savings consulted an independent financial adviser (compared with 20% of the total population).
Social media based digital marketing strategies will be effective in influencing this group.
6. Striving and Supporting
A busy and pressured group, most work full or part-time, but have low incomes.
The majority have dependent children, and are more likely than average to be single parents.
They will take advice about some products, but are more likely to use comparison sites for insurance.
They are generally risk averse, but tight budgets mean they are more likely to struggle with bills or fall behind with payments.
Key Issues
How Firms Can Reach This Group
This group is comfortable with technology, and seeks advice from a range of sources.
80% have an internet connection at home (vs. 76% of the total population) and 57% have smartphones (vs. 49% of total population)
55% have used online banking in the past three months (vs. 52% of the total population).
However, for some products they are more likely to use online information sources. For example, they are more likely than average to use comparison websites for taking out home or car insurance (68% vs. 57% of the total population).
Digital marketing strategies including blogging, SEO and social media are the most effective way of reaching this group.
7. Starting Out
A younger group overall, with most under 45 and more than half under 35.
Confident and optimistic as a group, the majority are single with no children.
Almost all rent their home, and income is slightly lower than average.
Three fifths are in work or studying, and there is a high level of education.
They are technologically advanced, conducting most of their financial affairs online.
Key Issues
How Firms Can Reach This Group
This group is tech-savvy, but they rely on family and friends for advice.
This segment is among the most technologically advanced. 68% own smartphones (vs. 49% of the total population) and 84% have an internet connection at home (vs. 76% of the total population).
76% use the internet as their main source of information for financial matters (vs. 59% of the total population). However, they are less likely than most segments to use price comparison sites (31% vs. 51% of the total population).
They are less likely than others to seek professional advice when experiencing financial difficulties (29% vs. 43% of those in difficulties).
Their main sources of advice about financial decisions are parents and friends.
For example, when opening a bank or building society account 30% consulted their parents (vs. 18% of the total population) and 24% spoke to friends (vs. 8% of the total population).
They are slightly more likely to keep an eye on financial matters than some other younger segments, especially the job market (37% vs. 21% of the total population).
Digital marketing strategies using social media for influence and SEO and blogging for reach will be effective with this group.
8. Hard Pressed
This group have low incomes, with many relying on benefits and struggling to pay for everyday expenses.
A high proportion are under 35 and most are single, but many live with dependent children.
With little money to spare, almost half say they aren’t planning for the future and over 60% have no savings or investments.
Financial literacy is low – about half the national average – with less than a fifth feeling confident about making financial decisions.
Key Issues
How Firms Can Reach This Group
Information comes from a range of channels, but this group tends not to follow financial news.
Many use digital technologies, although slightly less than other segments. 46% have smartphones with internet (vs. 49% of the total population) and 67% have an internet connection at home (vs. 76% of the total population).
48% get information about financial matters through TV and radio news (vs. 46% of the total population), and 56% also use the internet (vs. 59% of the total population).
They are more likely to use online sources for some services. For example, 62% use comparison websites when making general insurance purchases (vs. 60% of the total population).
They are much less likely than average to follow financial information, such as changes in interest rates, taxation or pensions.
This group can be reached by effective SEO and blogging digital marketing activity.
9. Stretched but Resourceful
Likely to live with a partner and own their home (some without mortgage), half of this group also have children living at home.
Incomes are relatively high and they are a generally risk-averse group.
They are fairly well-informed and confident about financial matters, but will spend money to save time and credit use is high.
Although generally able to keep up with bills, many would struggle to cope with an income or expense shock.
Comfortable with the internet, they prefer online to printed information. Many have savings and investments and the majority have pensions.
Key Issues
How Firms Can Reach This Group
The vast majority of this group (87%) has internet at home with easy access to information and services.
86% use the internet at least several times a week (vs. 75% of the total population). Most can easily use the internet in private (89% vs. 77% of the total population).
90% have a computer at home (vs. 78% of the total population) and 58% have a smartphone (vs. 49% of the total population).
83% find it easy to find what they are looking for online (vs. 74% of the total population). 62% prefer to look at information on a website rather than in a paper leaflet (vs. 51% of the total population). Digital downloads in the form of ebooks and fact sheets will appeal to this group.
They are more likely than average to be influenced by advertising when selecting products, with the vast majority agreeing that advertising helps them choose what to buy (84% vs. 72% of the total population). SEO activities will complement online advertising as part of a wider digital marketing plan.
10. Busy Achievers
Optimistic and confident, most of this group is in work, although 73% of this is part-time. The same proportion have children living at home.
With partners also working, household income is high and most have a mortgage.
Most also have pensions, and some savings. Home internet access and high smartphone and car ownership mean they can access information and services easily – but busy lives mean spare time is very limited.
Key Issues
How Firms Can Reach This Group
Members of this group are very active online and they independently monitoring financial news.
96% have internet access at home (vs. 76% of the total population), with 94% using the internet for personal use at least several times a week (vs. 75% of the total population).
98% have a computer at home (vs. 80% of the total population) and 71% have a smartphone (vs. 49% of the total population and 58% of Stretched but resourceful).
Accessing information and services is easy for most. 95% say they can find what they are looking for online easily (vs. 74% of the total population and 83% of Stretched but resourceful).
Like Stretched but resourceful, they are more likely than average to keep an eye on house prices (41% vs. 29% of the total population) and interest rates (42% vs. 28% of the total population), and they are more likely than others to use the internet to do this (78% vs. 59% of the total population).
People in this segment are extremely susceptible to advertising, with 94% agreeing that advertising helps them choose what to buy (vs. 72% of the total population). Digital marketing activities will be highly effective with this group.