1FEATURED INSIGHTS | SUPER INVESTORS Copyright © 2014 The Nielsen Company
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F E AT U R E D I N S I G H T S
S U P E R I N V E S TO R S: I N D I A’S N E W W E A LT H G E N E R ATO R S• Thesuperinvestorisamoreactive,prolificandaware
consumerwithalargerfinancialriskappetitethantheaverageconsumer.
• Superinvestorsarenotcontentwiththeservicesthatbankrelationshipmanagersprovide.
• Superinvestorstendtopurchaseinsuranceasaninvestmentaswellasameansofsaving.
Now out of the shadow of the Great Recession, global household wealth
is rising. In fact, the 2013 Global Wealth Report from Credit Suisse notes
that it hit an all-time high of US$241 trillion last year, up 4.9 percent
from the 2012. While this is certainly good news, the growth has been
even more impressive in India. Between 2012 and 2013, personal wealth
shot up by 7.4 percent to US$3.6 trillion.
The influx of wealth in India has also had a significant impact on
saving habits. With more disposable income, Indians are spending and
investing more. While property has always been a favourite investment,
Indians are re-examining their traditional choices and evaluating new
ones. Given that financial needs and reasons for investing are changing,
financial institutions are beginning to understand that the one-size fits
all approach no longer applies.
Recent Nielsen surveys of investor behaviour have revealed some
interesting information. But more importantly, they have uncovered a
new category of customers that should be of interest to all financial
institutions. We call them super investors. Who are super investors and
how are they different? Do they simply invest more money or is it that
they influence investment trends?
DELIVERING CONSUMER CLARITY
2 FEATURED INSIGHTS | SUPER INVESTORS
WHO IS THE SUPER INVESTOR?
Nielsen defines super investors as consumers who invest heavily and
are equally engaged with their portfolios. They are also loyal to the
brand, service or product, and their investments outweigh their savings.
Not surprisingly, super investors tend to be salaried or medium-size
business owners, metro-dwellers and property owners. They tend
to own at least one car. Of the super investors Nielsen polled, 75
percent were male and aged 35 to 45. The profile is slightly different
for super investors who opt for mutual funds and other equity-linked
investments. The average age of the investor in this case was between
30 to 40 years. Mutual funds seemed to be a popular investment choice
for businessmen and self-employed professionals.
“SUPER INVESTORS INVEST HEAVILY AND ARE MORE ENGAGED WITH THEIR PORTFOLIOS THAN AVERAGE INVESTORS. THEY ALSO TEND TO INVEST MORE THAN THEY SAVE.”
So what do super investors do differently? Our survey identified some
definitive behaviours that set them apart from average investors.
PROFILE
Higher proportion ofInvestment vs Savings(19% vs 12% at overall level)
87% are salaried
Most of them fromBangalore, Puneand Mumbai
35-45 yrs of age-49%(vs. 37% at overall level)
C/C+/SUV segment car 1/4th own more than 1 houseMale-75%
SUPERINVESTOR
Theyaremainlyfromthemetros;94%vs.62%onanaverage
Jointdecisionmaker;takesdecisionjointlywithfamily(68%vs.33%onanaverage)
Highno.offinancialproducts-6(Doubleofanaveragecustomer)
HighIncomeEarners(Monthlyhouseholdincome1.7xhigherthanavg.)
3FEATURED INSIGHTS | SUPER INVESTORS Copyright © 2014 The Nielsen Company
REASONS FOR INVESTMENTS
BIG ON PRODUCTS
Super investors tend to own more than one life insurance policy, and
they often express an interest or intention to own more. The policies
typically have a minimum value of at least INR 50,000, and super
investors use these policies for investment only. As a result, they rarely
miss making a premium payment.
In the case of mutual funds, Super investors tended to invest
approximately 1.6 times more than the regular customer. They mostly
make investments with lump sum amounts rather than systematically
over time. Here too, the average minimum investment is at least INR
50,000.
HIGHER RISK APPETITE
Super investors have a more diversified portfolio than typical investors
and they balance their portfolios with high risk investments such as
equity as well as safer and more traditional investments like gold and
fixed deposits. Their priorities go beyond specific objectives such as
saving for their children’s education or for their retirement to include
not just wealth creation but also ensure that there is no significant
change to their lifestyle post retirement. Since most super investors are
in their mid-30s, they tend to want investment options that will help
them secure the best opportunities for their children.
48
43
59
49
CHILD’S FUTURE
OVERALL SUPER INVESTOR
RETIREMENT
SUPER INVESTORS DEMONSTRATED GREATER LOYALTY TO PRODUCTS THAT HAD A SPECIFIC OBJECTIVE IN MIND SUCH AS RETIREMENT FUNDS OR CHILDREN-RELATED INVESTMENTS.
Source: Nielsen
4 FEATURED INSIGHTS | SUPER INVESTORS
AT HOME WITH THE JARGON
Old ways of doing business may not work with super investors. That’s
because they’re less likely to rely on traditional avenues of information
like banks, relationship managers and tax specialists. They are well
informed and source most of their preliminary information from the
Internet, friends, colleagues, and financial publications. Findings
from the recent survey found super investors to be aware of financial
terminologies as well as their implications.
CATEGORY UNDERSTANDING
SUPER INVESTORS HAVE A VERY HIGH UNDERSTANDING OF FINANCIAL TERMINOLOGY. HENCE IT IS IMPORTANT TO SHOW VALUE OF THEIR OVERALL INVESTMENTS. THE SALES PITCH SHOULD BE ABOUT BENEFITS OF INVESTING DIRECTLY.
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AUM
NAV
NFO
EXIT LOAD
SYSTEMATIC
ASSET LOCATION
AWARENESSOFMUTUALFUNDTERMS
2941
3145
2941
3244
2635
2534
MATURITY VALUE
SURRENDER VALUE
ENDOWMENT INSURANCE
TOP UP
ANNUITY
RIDER
SWITCHING
ASSET ALLOCATION
TERM INSURANCE
AWARENESSOFLIFEINSURANCETERMS
6383
5972
3761
4155
3251
3054
2642
2242
2342
AUM: Assets Under Management; NAV: Net Asset Value; NFO: New Fund Offer
Source: Nielsen
REGULAR INVESTORS SUPER INVESTORS
5FEATURED INSIGHTS | SUPER INVESTORS Copyright © 2014 The Nielsen Company
CRITERIA FOR CHOOSING MUTUAL FUNDS SUPER INVESTOR
RANK
RECOMMENDATION OF SALES AGENT 1
HISTORICAL PERFORMANCE OF SCHEME 2
OVERALL BRAND STRENGTH OF AMC 3
HISTORICAL FUND PERFORMANCE OF AMC 4
INCREASED ONLINE VISIBILITY
The super investor typically belongs to the upper echelon of the work
or business force. This category has easy access to the Internet, and
use it for financial transactions such as bill payments, fund transfers,
etc. In the case of insurance premium payments, for instance, most
super investors expressed their preference for making online payments
or using electronic clearance systems (ECS). Nearly 81 percent of super
investors polled said they were more inclined to purchase policies
online instead of through an agent to speed up the process.
NEW INFORMATION SOURCES
Super investors, as our survey discovered, no longer want to rely on a
single source of information. They want holistic expert advice, spanning
across products and brands, covering their entire portfolio and all their
investment needs.
The Nielsen survey revealed that super investors are no longer content
with the services that bank relationship managers provide. They cited
responsiveness and frequency of contact as critical to satisfaction.
This could be an area of focus for banks although it must be said that
multinational banks seemed more proactive in terms of making contact
with their consumers.
The high rate of churn within bank employees was listed as another
source of discontent. For customers, having a new relationship
manager means having repeat conversations about goals, priorities
and preferences. A stable transition and regular communication with
clients would probably help alleviate this issue.
While super investors prefer not to consult relationship managers for
their banking and insurance needs, they do turn to them for advice on
mutual funds. In fact, when asked to rank the criteria for selecting a
fund, super investors distinctly said they prefer the recommendations
of a sales agent over everyone else.
AMC: Asset Management Company
Source: Nielsen
6 FEATURED INSIGHTS | SUPER INVESTORS
WINNING OVER THE SUPER INVESTOR
The super investor is always on the lookout for new investment
opportunities. Having a higher risk appetite and a diversified portfolio
means they’re always evaluating investments. And when the time
comes to feed that appetite, they want a one-stop source of information
on products and services across brands to address their specific
investment needs.
BANKING: Being salaried, majority of the super investors tend to have
their primary bank account with private banks. However super investors
also displayed a high level of banking brand awareness. Our survey
indicated that super investors tended to own more banking products
than regular investors.
HIGH ONLINE USAGE
INTERNET USAGE OVERALLSUPER
INVESTOR
USE INTERNET 29 71
ACCESS DAILY 49 82
ACCESS INTERNET ON LAPTOP 3 40
THE SUPER INVESTOR IS CLEARLY A MORE ACTIVE,
PROLIFIC AND AWARE CONSUMER WITH A LARGER RISK
APPETITE THAN THE AVERAGE CONSUMER. FINANCIAL
INSTITUTIONS WILL NEED TO REVISIT TRADITIONAL
STRATEGIES WHEN APPROACHING THIS SEGMENT.
Source: Nielsen
WHEN IT COMES TO FINANCIAL ACTIVITIES CARRIED OUT ONLINE, FUND TRANSFER TOPS THE CHART WITH 91% OF SUPER INVESTORS
OPTING FOR IT.
7FEATURED INSIGHTS | SUPER INVESTORS Copyright © 2014 The Nielsen Company
Respondents during our survey, believed that current levels of service,
especially in private banks, need significant improvement.
Understanding the needs of the super investor is relatively easier than
it sounds, given that banks already know their net worth, their portfolio
and investment appetite. A greater understanding of the client’s needs
and priorities would help identify opportunities to position products or
services missing from the client’s portfolio.
Super investors tend to rely heavily on expert advice. This could be an
area of opportunity for banks who can create investor advisory roles to
fill the current vacuum.
“BANKSALREADYHAVEATHOROUGHUNDERSTANDINGOFACUSTOMER’SPORTFOLIOANDINVESTMENTAPPETITE.THEYCOULDLOOKASPOSITIONINGTHEMSELVESASHOLISTICINVESTMENTADVISORSTOTHESUPERINVESTOR.”
RELATIONSHIP OVERALLSUPER
INVESTOR
AVERAGE PRODUCTS 3 6
DEBIT CARD 85 97
FDs 13 46
CREDIT CARD 7 31
INSURANCE 35 86
AUTO LOANS 4 16
MUTUAL FUNDS 2 8
Source: Nielsen
8 FEATURED INSIGHTS | SUPER INVESTORS
INSURANCE: Super investors are already aware of how they can invest
in life insurance as savings as well as investment. They own at least 3 or
more life insurance policies and the average life cover is INR 9,79,158
which is nearly three times that of a regular investor.
INSURANCE POLICIES OVERALLSUPER
INVESTOR
Avg. number of policies held 1.6 3.5
Term insurance, however, is a new area of opportunity if pitched
correctly.
Retirement products like pension funds are also of interest to super
investors. They also exhibit a keen interest in products that have an
objective specific to their children, such as marriage and education.
Products that address these needs are likely to be successful. It would
be a good idea to focus messaging of these products online since this
is where super investors do most of their research.
But perhaps the best way to approach this segment would be to
recognize the value they bring and treat them accordingly. A dedicated
service manager would be one way of enhancing this relationship.
Also, considering their high levels of involvement with their purchase,
frequent contact would be the best way to ensure their engagement.
CONTACTED BY COMPANY
AFTER POLICY PURCHASE?OVERALL
SUPER
INVESTOR
YES 49 52
MOST SUPER INVESTORS ALREADY OWN MULTIPLE LIFE
INSURANCE POLICIES FOR INVESTMENT PURPOSES.
Source: Nielsen
Source: Nielsen
“THE NEED TO INVEST ADDITIONAL MONEY -
COMES OUT AS THE MAIN REASON FOR HAVING
MORE THAN ONE INSURANCE POLICY.”
9FEATURED INSIGHTS | SUPER INVESTORS Copyright © 2014 The Nielsen Company
MUTUAL FUNDS: Our data indicates that super investors in this
category buck the trend we’ve seen in this consumer segment.
Unlike the others, these consumers are self-employed and have been
investing heavily in equity for a considerable period of time. Like any
shrewd investor, past performance is a factor in making purchasing
decisions as is reliability. So it isn’t surprising that the majority of
super investors list the AMC (Asset Management Company) brand as
the most important factor when making their choice.
That said, since their investments are usually made in lump sum
amounts rather than in instalments; redemption based on market gains
is also high.
The key to approaching mutual-fund investing super investors is to
remember that they do not view this investment option as a savings
mechanism. They have a much higher risk appetite than the regular
consumer. Equity-linked saving schemes (ELSS) are not likely to be
successful with this investor. Instead, our survey indicates a strong
preference for equity and debt-based mutual funds.
SUPER INVESTORS IN THIS CATEGORY VIEW MUTUAL
FUNDS AS WEALTH GENERATORS RATHER THAN AS
SAVINGS. EQUITY AND DEBT-BASED FUNDS ARE LIKELY
TO BE SUCCESSFUL WITH THIS CATEGORY.
5941
35
65
Choose the scheme first
First choose the AMC and thenscheme
Source: Nielsen
Figs. in %
OVERALL SUPERINVESTOR
10 FEATURED INSIGHTS | SUPER INVESTORS Copyright © 2014 The Nielsen Company
CONNECTING WITH THE SUPER INVESTOR
Digital activation and engaging with super investors at their work place,
are recommended ways to effectively connect with this segment. Given
the high rate of online activity, ads, banners, pop ups, and emails - both
about brands as well as specific products are a good idea. However,
the importance of television messaging cannot be underestimated
with nearly 54 percent of super investors stating that they had been
influenced by advertisements on television.
Super investors can be wooed with improved service levels, greater
responsiveness, and proactive contact. Products that cater to their
priorities and risk appetites are far more likely to succeed than a generic
offering. If approached correctly, super investors are a huge opportunity
just waiting to be tapped.
THENIELSENQUALITATIVEVIEWBY: SARBANI SEN AND SIMERAN SETH, NIELSEN INDIA
• Super investors desire to be recognized and acknowledged
for their awareness and expect a ‘distinct’ product and
service offering.
• One size fits all is passé; marketers today need to identify
and segment such customers with precision.
• As companies vie for a larger share from super investors,
there is an increased need to devise separate strategies and
structures that can support and match their needs.
11FEATURED INSIGHTS | SUPER INVESTORS Copyright © 2014 The Nielsen Company
ANAND PARAMESWARAN
DIRECTOR
NIELSEN INDIA
ABOUT THE AUTHORS
ADRIAN TERRON
SENIOR VICE PRESIDENT
NIELSEN INDIA
NIDHI KAUSHIK
ASSOCIATE DIRECTOR
NIELSEN INDIA
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12 FEATURED INSIGHTS | SUPER INVESTORS
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