A "little something" for when I die

Many of my parent’s generation had insurance policies so that when they died their children wouldn’t have to pay for their funeral. It was just the way it was.

Being concerned about the "final day in the ground" comes way down my list of financial priorities, but as I know so well, you cannot extrapolate the desires of the market from your own opinions.

Clearly, there are a lot of people, like my mum and dad, otherwise LV= (the worst corporate name in history) the finance group wouldn't be launching this TV advertising campaign to promote its '50 Plus plan'.

As I watch the ad I wonder who it is aimed at. Is it the children, to try and get them to encourage their parents to take out a policy or the parents themselves? A bit of both I guess.

The Creative Director of the advertising agency said: "It's a new approach that takes the tried and tested formula we know customers like and uses it in a dynamic and emotive way". A splash of guilt and a dash of the promise of fond memories all packaged in a suitable multi-cultural ad.

Apparently the advertisement was previewed on Facebook and YouTube in December 2009 before being launched on terrestrial, satellite and cable channels in January 2010. Interesting. Dick Stroud

AXA launches motor insurance brand with 'pavement rage' ad

AXA is launching a £10m marketing campaign to support the launch of its new direct motor insurance product targeting older drivers. This is AXA’s first foray into the direct insurance. Previously it had focused on the broker market.

I am quoting from Brand Republic that: “AXA Car Insurance will target older drivers who feel they are not catered for by other brands, by offering them a 90% no claims bonus.”

The TV ad shows pedestrians bashing into one another on a busy city-centre
pavement. A voiceover then states, ‘You wouldn't behave this way on foot, so why would you when you are driving?'

The tagline for the campaign is: ‘AXA drivers get up to 90% discount on their car insurance. Disrespectful drivers don't.'

In parallel TV celebrity Charley Boorman (who you might ask is he) will front a PR push, including a website inviting consumers to air their views on the state of behaviour on the road today. How weird.

As you will see from the ad, the big punch line for Axa is - Redefining Standards. I mean, that is going to really get grampa out of his seat and punching the air.

Some obvious observations. This is a covert campaign that selects the older age group on the basis of their long driving record without a claim. I can see the strength in that argument. So unlike RIAS there is no mention of 50+ or anything to do with age.

But, my hunch is that by making the creative so confrontational – literally – the message about 90% discount is going to get lost. I am still thinking about attractive oriental looking lady, the short guy and the lunatic looking women.

And, one thing that older people (who I wonder do they mean as older) tend not to like is confrontation and aggression (yep, I know a bit generalisation). I think a lot of people will have switched off their engagement with the ad before it gets the thing that really matters – money off their insurance.

I guess the smug looking George Clooney lookalike is the visual anchor to the 'older' person.


Sorry guys. I reckon it’s a lemon. What do you think? Dick Stroud

The cost of long term care something we would prefer to forget

You cannot blame Jo and Jolene public for putting their head in the sand and ignoring how the hell they will pay for their long term care. The Government has been doing it for the past few decades so why should its citizens be any different?

This item is from an online Independent Financial Adviser publication and spells the problems and the opportunities to the Finance Industry.

The marketing issues that have to be overcome are considerable. Most people reckon they have paid enough tax over their lifetime and hence the state should pay for their care. Most people don’t want to plan, 5 years into the future, let alone 50 years. Forgoing life’s pleasures today, for a better standard of care home, is not something to excite your average consumer.

Other than these factors it is a pretty straightforward marketing challenge. Dick Stroud

Time to read the tea leaves

It’s that time of year where you cannot open a newspaper without reading predictions for 2010 and rationalisations of 2009. I thought that enough had been written about 2009 but it might be interesting to speculate about the coming 12 months – from the perspective of the things that will be important when marketing to older people.

So what issues will keep the 50-plus marketer awake at night in eager anticipation or dread? My top five – not in any particular order are:

Technology 1. The combination of smart new mobile hardware and operating systems, 3G, GPS, motion detection, zillions of data feeds, speech and character recognition all tied up in a bow using apps development toolkits makes for the most exciting thing since we typed our first http://www. 2010 will be the start of era of 50-plus apps that will create fantastic new marketing opportunities.

Technology 2. Web video is still on a rapid upward trajectory. In 2009 it went from being something of a novelty to a media format that all web sites had to consider using. 2010 will see the use of Web video as an effective format to communicate with older consumers, really come of age (excuse the pun).

Technology 3. Social networking is here to stay but is becoming something of a bore. Back at the beginning of recorded time e-mail was exciting and something worth talking about – not any more, other than to moan about the time it consumes. I reckon that generic social networking sites are going the same way. The higher income 50-plus pretty much mirror the usage patterns of the Web. Sure they will retain their Linkedin and Facebook accounts but so what?

Advertising. For years I have been saying that: “this is the year when advertising becomes more age-neutral.” Why break the habit of a lifetime and say it again. Honestly, I do detect that the message is slowly getting through that advertising creative has to expand outside its Yoof-centric ghetto, if for no other reason than the barrage of news that shows the levels of youth unemployment – boomerang kids, dependence on “bank mum and dad” etc etc. Yoof is having a tough time and has lost its lure for advertisers. This brings us to the number one issue.
The really biggie.

The Recession. The perilous state of the economy in the UK, much of Europe and the US is scary. 2010 is going to be a turning point – unfortunately I am not convinced that it is turning in the right direction. At best it will be dreadful. At worst – you don’t want to know. If you want the gory details then have a read of Robert Peston’s 31st December blog. Peston is the BBC’s head economics journalist.

One thing for sure is that for marketers, willing to think outside the box and have the guts to take chances, there will be lots of opportunities for relieving the 50-plus of their hard earned cash.

Happy New Year. Dick Stroud.

The £178,000,000,000 problem

Let’s say a friend earns £498 per week, day, hour depending on what business they you work in but they spend £676 in the same period. Now let’s say they have been spending more than they earn for sometime and expect to do so for years to come.

In fact they expect the difference between what they spend and their earnings will increase.

Put on your marketer’s hat. Do you think this is a credible situation or do you expect that reality will soon catch up and they will have to make some substantial cut-backs in their lifestyle. You have friends living in Greece and Ireland who have been equally crazy with their financial affairs and the news from them is not good.

OK, multiply these numbers by a billion and you have the state of affairs in UK plc. I know there is a big difference between household budgets and national fiscal affairs but there is also a lot in common. The elephant in the room for 2010 and years to come is a £178 billion deficit.

Martin Wolf (The FT’s lead economic correspondent) opened his article in today’s paper

The UK is poorer than it thought it was. This is the most important fact about the crisis. The struggle over the distribution of the losses is going to be brutal

Does the UK’s financial crisis mean that commerce, as we have known it will come to an end - of course not? Will their still be lots of opportunities for innovative marketing ideas – of course there will be. But, and a thousand times but, the bland assumptions we have been able to make during the unreal times of the past decade will not keep working.

The rock certain prediction about 2010 is that marketers are going to have to work a lot harder for their wages. That applies equally to those targeting pensioners or school kids.

There is one group of consumers who are living a charmed life, for now. The Office for National Statistics has just released data showing that public sector workers are still receiving pay rises nearly three times higher than their counterparts in the private sector. Happy Xmas. Dick Stroud

Understanding how the 50-plus are thinking about the recession

I have been amazed how few companies have reflected the changes in consumer attitudes, resulting from the recession, in their advertising. Most companies have been limited to reducing prices and stressing their “good deal” credentials. That might be step one, but the recession has changed a lot more than just wanting to trade down.

This ad from Prudential, whilst not startling in its creativity, at least recognises that older people will have responded in different way to the trauma of the past 24 months. Hopefully you can read the copy (click on the image for a larger version) – the weakest part of the ad. Dick Stroud

Predicting the economic health of geographic areas

Marketers spend a lot of their time trying to be smarter than their competitors by being better at predicting the future. My experience has been that there are lots of small crumbs of information about and if you spend the time looking you can add them together to increase your odds of guessing right.

Here is an example of what I mean. The graphic shows the contribution to local economic growth between 1997-2006 (%) of public, rather than private sector expenditure. The one thing we know for absolute certainty is that in the next decade public sector spend will be slashed.

The geographic areas that owe their economic existence to the public purse are going to be really badly hit. If I was looking at the map of the UK for places to make my marketing bets it would be those with the least threat from spending cuts. Of course there are lots of other factors to take into account, like population density, but in the eye of the blind the one eyed man is king. Better one, hazy eye, than none at all. Dick Stroud

Is inertia marketing ethical, legal or effective?

Thanks to Chris Gosling for passing on this story about the perils/rewards of inertia marketing.

Imagine you went into your local pub and was charged you £7 for a pint of beer. You paid them, drank the beer and departed. Next time you visit you are charged £8; you pay, drink the beer and depart. This continues until the end of the week you pay £12 for a pint and then a friend taps you on the shoulder and asks: “why are you paying four times more than me for the same drink?”

You are enraged, demand to see the landlord and ask him why you are paying so much more than your friend. The landlord says: “because he is a pain in the butt and always asks me to lower the price - you are daft old sod and don’t ask, so I add another pound to compensate for what I lose from serving your him.”

So what do we conclude? You are a fool? The landlord is a brilliant marketer who is able to increase his gross margin by 100s of percent. If this works for a pub, why doesn’t Tesco try and do the same?

OK, what’s the point of these ramblings? Substitute buildings and content insurance for beer and you have what the Royal Sun Alliance insurance (RSA) company has been doing for years and years. Have a read for yourself.

So what do we do? Nominate the marketing director of RSA for marketer of the year or have the guy/girl publicly humiliated? Hero or villain?

I would think RSA knows that the trust in Financial Services cannot go any lower so the may as well exploit their customers. They are only doing what their customers expect of them. Dick Stroud

Prudential withdraws from equity release market

For a lot of the 50-plus, certainly the 70-plus, the expectation was that if "pushing comes to shoving" then their house would provide an income stream by use of equity release (reverse mortgage).

In a surprise move the Prudential said on Tuesday that it is to stop selling equity release products.

The Prudential, one of the top three providers, has been selling lifetime loans since 2005, but its decision to withdraw is believed to be due to access to funding for the loans.

It is not just The Prudential that has decided to call it a day. The number of providers of this financial service has dropped from 20 to 11 over the past year.

Maybe this is a temporary blip. If it is the start of an avalanche, then there will be a lot of worried older people. Dick Stroud

Britain - vision of Japan’s decade of stagnation

I haven’t written anything about the recession for some while. That doesn’t mean to say that it is no longer important or that it is still not the only show in town for marketers – it is.

There is only so much doom and gloom that you can read and write. Of course recessions create lots of business opportunities but, for most marketers, it is and will be grim.

I am sure you will have seen the countless ads that infected the UK TV for “consolidation loans”. The proposition was simple. You might be up to your neck in debt one of these loans can help by consolidating the debt into a single loan, give you a bit of breather from paying the interest, secure the loan on your house and then charge you an even larger interest rate in the future.

The UK is like the consumer who was duped by this sales line. It has consolidated its debts, into a staggeringly large public sector debt, and the nation is waiting for the first repayment bill to drop through the Treasury's letter box.

Until now it is only the unemployed who have suffered from the recession. The task of paying back the debt will affect everybody.

If you think I am overstating things have a read of this leader in today’s New York Times. Not a happy story. Dick Stroud

Britain may finally be emerging from recession, but many analysts warn that it is a false dawn. In fact, they argue, the economy here is so ravaged by growing debts and ruined banks that it could well be following in the steps of Japan’s lost decade of the 1990s.

The parallels are eerie: Like Japan, Britain enjoyed more than a decade of booming growth, fed by aggressive bank lending and real estate investments. Haunted by the comparison, policy makers have been extra aggressive in using fiscal and monetary levers in hope of preventing the stagnation and banking stasis that plagued Japan for so many years.

Some economic indicators over the last week have been positive: an uptake in retail sales, fewer jobs lost and an export revival. Yet analysts say they may well turn out to be teasers that cloak deeper, more structural flaws in the economy.

In addition to rising debt, the tax base is collapsing and the crippled banking industry has yet to show it can generate profit by lending to companies. And so on and so on and so on…..

RIAS's focus on the 50-plus pays off

RIAS, the insurance company that is exclusively for the 50-plus, has been voted in the top 2 Car insurance providers in the UK, by the Auto Express readers in the 2009 Driver Power survey, the same position as in 2008.

To drive, sorry excuse the pun, the company on to bigger and better things it has appointed BUPA's ex-chief marketing officer as marketing director, with a remit to increase the brand's use of digital channels in its direct marketing mix.

Just goes to show how successful a company can be that commits to selling to the older market.

A word of advice to the new marketing director. Have a good look at the company’s web site. It is need of good spring clean. Not very logical, inspiring or easy to use. Dick Stroud

Getting older going into debt a UK and US problem

In March 2009 I wrote that in the UK borrowers approaching retirement owe four times as much as 10 years ago. I just read another report, this one from the US, titled “Debt of the Elderly and Near Elderly, 1992–2007” from the Employee Benefit Research Instiute. This paints an equally horrible picture of what is happening to the debt profile of older
people.

The headlines from the report say

Debt levels rising: Debt levels of those in or near retirement age are heading up: Among elderly families—and especially among the lower-income elderly—both housing debt and consumer debt levels are rising. For some cohorts, a substantial percentage have debt levels well beyond the threshold considered problematic.

Percentage with debt: A growing share of older American families had incurred debt through 2007, particularly those ages 55–64—the ages right before or at the start of retirement.

Debt levels: As the percentage of families with a head age 55 or older with any debt increased from 1992–2007, the average total debt level also increased: from $32,191 (2007 dollars) in 1992 to $70,370 in 2007; the median debt level (half above, half below) of those with debt increased from $15,923 to $43,000.

Rising housing debt a major concern: Although rising debt levels are not necessarily a sign of danger for all elderly or near-elderly families (especially if they are also high-income), rising housing debt is of particular concern, since housing typically is the major asset elderly families have. Leveraging it at this point in their lives may leave them without a major resource to finance an adequate retirement, given the recent downturn in the housing market.

What is terrifying about these results is that they are prior to the recession. Ahhhh. Dick Stroud

The 50-plus are the best stock traders

A big caveat, so beware. I have not idea how good or bad this research is (conducted by Fintrader.net) but I think the results are fascinating, even if they are wrong.

Here are some quotes:

A new five year study of financial trading shows that the over 50s are by far the most successful, profitable traders and investors: a full 40% more profitable than their 20-something counterparts and 25% better than the 30-50 group.

Time spent trading was a factor for all three groups. The 18-30s and over 50s spent more time on their portfolios, which may be because the 30-50 group had greater work and family commitments elsewhere. But clearly the over 50s had much greater productivity.

The 50+ traders took higher risks for higher returns than the 30-50 group. So maybe the 50-plus are not more risk averse argument

The secret to the difference between youth and age lay in discipline. The 18-30s tended to break trading rules and failed to follow systems through. Maybe they had poor attention spans as they would often close out winning trades too soon. Older traders kept better records and managed their money better.

The 18-30s made great use of internet information, charts and chat rooms but so did the over-50s (more than the 30-50s), becoming extremely web savvy and using a wide range of online tools. So maybe the 50-plus are capable of using the Internet.

Older investors are sick of earning 1% a year and being sucked dry by high management costs for poor advice and are now learning to trade markets themselves.

One theme which is common to all groups is “total distrust of financial advisors and professionals. Really bad news for the Financial Services industry

My instincts tell me these results are probably correct but then I might be falling into the trap of using age stereotypes. Dick Stroud

Prudential - new advertising campaign

This weekend the quality newspapers were full of a new advertising campaign from Prudential.

I like it.

I like it because it clearly understands the concerns of the older consumer who has seen their investments and pension expectations taken a hammering by the recession.

Another ad, that uses the same guy, has the copy:

At 65 you should have a lot to look forward to.
And it isn’t just being 66.

The body of the copy says:

Clichés about retirement often pain a pretty picture. Twenty years of gold, grandchildren and pottering about the garden, but you probably know from your own parents it’s rarely that simple.

Life’s day to day demands have a habit of scuppering long term plans……..

I really like the style. Note that the ad appears to be targeted at the children of the 65+ but I am sure it will also have an impact with the older consumer.

I was also impressed to see that Prudential was making use of Web video. It a long (25 mins) pension surgery with Alvin Hall and a retirement specialist from Prudential. Impressive stuff. Dick Stroud

What’s going on in the UK residential care market?

I have written a lot about the perilous state of some of the biggest companies in the UK residential care business. Too much investment in property at too high a price creating too much debt with too little thought about the long term consequences.

Ooops nearly forgot. Too much faith in the simplistic notion that an increasing number of older people means that care home fees are on a one way journey in the upward direction.

The magazine Health Investor (subscription) has an article suggesting that Royal Bank of Scotland has: “earmarked some £250 million of capital for various development projects in the residential and social care sector.”

The argument goes that there could be a bonanza for companies, with cash, being able to buy land at greatly reduced costs and probably also get building work done at knock down prices.

I am not so sure. There are two elephants in the room. First, domiciliary care is definitely the flavour of the day. Older people want to stay in their home longer and Government loves it because it is cheap. Second elephant, is a massive pressure on funding for elder care that is about to hit as public expenditure is slashed.

The Health Investor article tempers its views with some pessimistic opinions from people in the Care Industry who say that it is impossible to raise funds for new developments.

I have another explanation why RBS might be freeing up a few millions for further investment in the Care Sector. This bank was the largest investor in the sector during the boom times and has consequently taken the biggest hit as asset prices tumble. The bank has funded a lot of development projects that are just about coming on stream and will start to eat more cash.

I suspect the new money is going to find its way in keeping the bank’s existing investments alive rather than funding new ventures. Anybody from RBS like to comment? Dick Stroud

What value PR initiated research?

Anybody who reads this blog knows that I am ultra-sceptical of the worth of PR research results (i.e. research that is done to generate column inches/cm).

Scottrade, the online investing company, has researched how age affects the attitudes to investing and concluded that young investors (born 1983-1991, ages 18-26) are the most likely to manage their own investments and to describe investing as “fun and interesting.”

Gen Y was also the most confident that it would recoup its losses quickly, with half of investors expecting to recover fully in less than two years.

What the report of the research did not disclose the levels of investments by age. I would guess that your average 18-26 year old is investing a tiny fraction of a 43 -64 year old, so it isn’t surprising that they might have different attitudes.

I really do wonder the worth of this straw poll type research, however, the fact that I have written about it shows that it achieved its objective and generated commentary, so I guess it was successful in that objective. Dick Stroud.

Retirement Revolution – new reality

The Massachusetts Mutual Life Insurance Company has sponsored a TV series - The Retirement Revolution Series – that is a 90-minute national documentary series broadcast by PBS that looks at the financial, social and health challenges facing Americans.

Why don’t European companies do something like this? Why don’t European companies understand to use their own YouTube channels? Dick Stroud

The new Post Office advertising campaign

Post Offices are strange things. They are peppered all over the UK in towns and rural areas.

Long ago they were an integral part of the UK mail service. Now they are places you go to send a parcel, buy a postage stamp and wait in a long queue.

Some older Brits have a strange attachment for them (you might have guessed that I am not one of them). The UK Government has swung from trying to kill them off to now thinking they are a worthwhile thing.

Post Offices are an expensive distribution channel looking to distribute something other than basic postal services. As UK banks try and ditch low value bank accounts, especially those that rely on their branch network, some bright spark has decided to get more people to use the Post Office’s very basic banking services.

Who are the natural targets for this service? Come on who do you think? It is the oldies.

These are the people who don’t use online banking (Mmmm) these are the people who have the spare time to spend it in a long queue waiting to get served. All of this is a well known fact.

To appeal to this group, that the Post Office reckons are ABC1 55+, it is launching its largest ever marketing campaign that will, for the first time use television advertising. The man chosen to front the campaign is Sir Roger Moore who was/is known for his role as James Bond in an era when TV was in black and white (I jest).

The Post Office’s head marketing honcho says: “ the aim of the new campaign is to demonstrate its confidence and stature in the financial services market and boost awareness of its range of savings offers.”

Now the really interesting thing is that the campaign was created by Mother – an ad agency once known for its willingness to push the envelope and do strange and daring stuff. It will be fascinating to see how these young advertising hotshots go about engaging with their grandparent’s generation.

As soon as the campaign material is available I will make it available plus my comments, however, I think they have already made a fundamental mistake in their target customers. I would have said that if there are any customers for these banking services they are C1DE socio economic groups aged 65+. We will see. Dick Stroud

RIAS provides good reasons to target the 50-plus

As can be seen from the above chart (taken from the RIAS report “Still giving at 50”) there are lots of tangible (and profitable) reasons to treat the 50-plus as target consumers – like they spend more money than their children and grandchildren. Dick Stroud

RIAS adopts a new theme for its advertising

In the past RIAS has very successfully pursued a simple style of advertising with a single message: “If you are 50-plus you can get your insurance cheaper at RIAS.”

The result has been that RIAS is now a major player in the UK insurance market. There is nothing like a simple message.

This month the company has launched an integrated campaign to move things to a more sophisticated (aspirational) level. The message now is: “You are 50-plus, you contribute a lot to the economy and you have lots of life left to do extraordinary things”.

First came the PR campaign. This was a classic “research campaign” aimed at generating press comment. It is a nice bit of research and definitely worth downloading.

Then came the new ad and press campaign.




Overall, I reckon they have done a pretty good job.

I don’t particularly like the ad, but readers of this blog will know I have an aversion to water being used in the context of illustrating the vigour of age – a purely personal thing.

As always, I welcome comments from the marketing titans that read this blog. Dick Stroud

Another supermaket has a crack at the 50-plus finance market

Asda (the supermarket chain) has started selling over-50s life cover products and plans.

Yesterday, Asda launched its "Over 50s Life Cover" product, developed by insurance group LV= (the financial company with the daftest name in the UK).

The products will be available in-store, online and by phone.

LV= gets around, since it also sells its products via Intune – a finance portal it runs in conjunction with Help the Aged.

I guess you cannot have too many channels to market. Dick Stroud

Two bits of good news for the Finance industry – I think.

Firstly, nearly half of over 50s Isa savers plan to invest up to new limit, according to Legal & General. Not surprising considering the dreadful rate of interest on savings accounts that deduct tax.

Secondly, consumers aged 50 and over are most likely to use more than one credit card to manage their finances, with almost half admitting to using two or more. So says Saga. I like the use of the word ‘admitting’ rather than ‘bragging'.

I am not sure if there is a connection between these two factlets, but they might be useful at some stage for a presentation. Dick Stroud

Ahhh – not another photo of a couple strolling on a beach

This article in Marketing Week is about an oldies research study from Business Development Research Consultants (BDRC) that is be based on 5,500 interviews. The study appears to be mainly aimed at the Financial Services industry.

Some of the ‘headline’ comments:

1. The 50-plus group used to be far more homogenous; kids flying the nest and people being ‘empty nesters’ and then eventually retiring. It used to be very well delineated but this is changing

2. Delayed “empty nesters”, who have discovered their nests are no longer so empty now the kids are back again, may have to come out of retirement and then go back to work.

3. Grandparents are becoming childminders to their children’s kids and this greater family interaction is creating a generation of “blended families”.

4. Marketing by life stage is a more effective mechanism to engage with consumers than focusing on age.

5. The jargon used in financial services can be bewildering. Relating marketing to real-life situation is a far more effective way of engaging with the 50-plus market.

I have to say that none of these insights knocks my socks off. I am sure there must have been more interesting observations than these – surely? These points are all so 2005.

Here is one observation that was not reported about the Financial Services industry. Most of the 50-plus believe banks, insurance and all other types of ‘investment’ companies to be incompetent and self-serving. OK, I might exaggerate a tad but believe me if you see the research that passes over my desk the Financial Services industry is always on the bottom of the pile of ‘trusted’ organisations about the same level as UK politicians - that is low, low, low.

The Financial Services Industry has a massive confidence building job of work to do. If I were them I would start there. Normally, I would say to never consider the 50-plus as a single group, but their dislike of the Finance Industry is one thing that unites them.Dick Stroud

The finances of the over-50s under pressure

Yesterday’s media was full of bad news about the finances of the 50-plus.

The BBC covered the research from Scottish Widows that found that those retirees with outstanding non-mortgage debt owed an average of £7,344, up from £6,732 in the same poll a year ago.

Also, it is getting harder to ditch the financial burden of children with 7% of retirees stating they are still paying towards the upkeep of their adult children

The most concerning ‘fact’ was the finding that 15% of retired people were also still paying off a home loan, with an average debt of £50,100, up £8,000.

The same research is covered in the Daily Telegraph except this time the focus is on the way the Finance Industry is reducing the maximum age they will lend to, with many introducing a cap of 65 years old.

As a result, retired home owners with a mortgage are struggling to find new deals and face being evicted from their properties if they do not have the cash to pay off their remaining home loan with one lump sum. I suspect there is a bit of journalist licence in this statement.

Finally, The Daily Mail reports the way the recession means “millions of people” are having to delay their retirement plans.

The paper says:

Nearly two million people have been forced to put off retirement after seeing their pension funds plummet.

More than a third of those in jobs and over 55 plan to keep working until the stock market recovers, pulling their retirement income back up with it.

Almost a quarter of this age group now expect to work beyond the state pension age of 65, while 32% admitted they were not prepared at all for retirement.

All in all, yesterday was a good day to miss reading the papers. A couple of caveats. Yes, yes there is truth in all of these reports but be beware of PR research since you be sure it will be presented to favour the company involved.

Secondly, don’t generalise from the specific. The UK has a lots of young people who are not in employment or training but a lot more who are.

Still, none of this is good news. Dick Stroud

Lessons for the UK banks from Japan

Maybe Japan offers some clues how the UK banks could go around repairing their ‘tarnished’ image with the over-50s. Today’s FT has a good article in its ageing in Japan series (sorry it is subscription only).

The most wealth older customers of Bank of Tokyo Mitsubishi UFJ were recently invited to an exclusive outing in a traditional Japanese garden where they were able to enjoy a cherished summer ritual – firefly-viewing.

The club, which is targeted at senior depositors with Y10m or more in the bank, is part of the bank’s efforts to attract more business from Japan’s older citizens, who own the bulk of the country’s financial assets.

BTMU is not alone in targeting the seniors. Sumitomo Mitsui Bank manages its own club for people aged 50 and older, called SMBC Club 50s. In this case the club’s members are treated to free seminars.

The UK banks would need to do a lot of customisation for the local market but the intention would be the same – to send a signal that they value their older and wealthy customers. What a novel idea that would be for the banks who have spent the past year decimating their clients’ savings by slashing the interest rates. Dick Stroud

Life Insurance companies focus too much on the 50-plus

I think this is the first time I have ever written that an industry is focusing too much on the 50-plus. In the US, this is the conclusion reached by Mintel, the research company.

In the 12 months ending June 2009, a study found that Gen Xers received 15% fewer health insurance marketing direct mail pieces than Boomers. Gen Y had even fewer offers falling on their post mat - 25% less than their parents’ generation.

I would have thought this is one of the bonuses of being young, but no. Mintel believe the young are a bit miffed at being left out and would welcome the attentions of the Insurance marketers. I wonder. Dick Stroud

Differences in the income distribution between men and women of different ages

These charts are taken from 2006/2007 data published by the UK’s Inland Revenue.

A few observations (some blindingly obvious):

• How much lower the mean and median of women’s income is to that of men
• For the age range 30 – 54, women’s income is almost constant
• The substantial differences between mean and median, especially for men, that illustrates there are a hell of a lot of lower paid people that brings down the average.
• The median income of men aged 65+ is about half of that of those aged 45-49. Note there is nothing like the same fall in the level of women’s income.

Fascinating stuff. I will next publish some musings about the distribution of wealth. Dick Stroud

Over-50s are confused about finance - so are the financial institutions

Today there is research published that comes to totally different conclusions about the financial attitudes of the over-50s.

LV= concludes that Britain's over 50s are struggling more than ever to keep up the level of savings needed to fund a comfortable retirement lifestyle.

Who or what you might ask is LV=. Every time I write anything about his company I wonder how much they paid their branding consultancy to come up with this name.

On the same day we read that: “Contrary to the perception that people are stashing cash under the mattress in the recession, research by Saga Financial Planning shows that many over 50s are forecasting strong investment opportunities over the next 18 months, with nearly a third (29%) tipping shares as good prospects.

Optimistic over 50s are also seeing growth potential in the housing market, with a fifth (20%) thinking it offers superior long term returns. One in ten says that savings offer the best opportunity to make the most of their money.

Pays your money takes your choice who you believe.

With all of this PR generating research you have to ask yourself: “what research results are in the best interest of the company.” It is amazing how the results and corporate best interest seem to coincide. Call me a cynic? You had better believe it. Dick Stroud

Asking media consumers about their consumption - weird idea

The investment bank Morgan Stanley has published a report on teenage media consumption written by a fifteen year old.

The intern was asked by the company’s media and research department to describe how he and his friends "consumed media" like games consoles, cell phones, television and the Internet...

Morgan's head of media analysts said his report was "one of the clearest and most thought provoking insights" the company had seen. So they decided to publish it, and to much interest among its clients, which include media investors and executives.

This article in Forbes gives a balanced account of the paper. You can also download the full research paper.

To be honest it didn’t say anything that came as a great shock. Anybody who looks at generational media consumption data should already know this stuff. The fact that the guys at Morgan Stanley were so shocked goes some way to explaining the chaos in the financial markets?

How about Morgan Stanley media analysts trying another idea and have somebody in their 60s and 70s write a paper about their media consumption? Why do I think it will not happen? Dick Stroud

Grey Power - specialising in the insurance needs of mature Canadians.

I have been travelling in Canada. When overseas it is always fascinating watching TV ads and wandering around shopping malls looking at how other countries tackle 50-plus marketing.

I have seen a lot of ads for Grey Power. This is not from the current ad campaign which I think a lot better. The company has a nice clear web site and a simple and compelling message. Looks good to me. Dick Stroud

Financial institutions - we don’t trust you

Harris Poll has asked Americans about their trust of financial institutions (this includes all sorts from banks to insurance companies) and discovered an interesting generational difference.

Almost two-thirds (64%) of Gen Xers (those aged 33-44) and 61% of Baby Boomers (those aged 45-63) say they do not consider any of these to be honest and trustworthy compared to 52% of Echo Boomers (those aged 18-32) and 53% of Matures (those aged 64 and older). So grandparents and Yoof have more trust than their parents. Dick Stroud

1.8 million UK grandparents save for the grandchildren

The importance of grandparents' spending and wealth transfer to their grandchildren must not be undersestimated, or worse ignored.

Grandchildren are important to their grandparents. Day in and day out, gramps and granny are spending large amounts of dosh on their kids children.

This bit of research from Saga concludes that 13% of the grandparents (1,800,000) regularly save money for their grandchildren and that 20% of grandchildren will receive a pots of £10,000+ when they reach adulthood. The way the UK economy is going they will need it!

I would have thought this intergenerational dynamic is of great interest for the Financial Services Industry. Dick Stroud

Don't keep telling me about the problem give me a solution

Aviva is the UK’s largest insurance company and has taken to doing bits of research showing the dire financial straights of the UK’s over-50s as they reach retirement not having enough savings for their own wellbeing or that of their parents.

The most recent press release is: ‘Baby gloomers’ unprepared for parents’ retirement care.” The one before was: “A growing sandwich generation survives not thrives.”

I am sure the research is right on both accounts; however, it raises an interesting marketing question: “ Why keep telling people that they are, or will be poor, when they can’t do anything about it.” Maybe worse than that, why keep telling them about their lack of savings when they perceive the reason for their plight as being the fault, probably incorrectly, of the incompetence of finance companies like Aviva.

Aviva, don’t get me wrong, I totally understand why you are undertaking this PR research and I am sure the messages you are telling are true and sensible, but isn’t it counterproductive?

Now here is an idea for you. You rightly identify that there is a lack of knowledge about the costs and procedures of providing care. Why not divert your PR research budget into creating the definitive web site to help the sandwich generation navigate the unfathomable route between the NHS, social services and the charities who make up the elder care jigsaw. Dick Stroud.

Seniors as entrepreneurs - their time has come

Business Week has an article about the growing number of older people who are starting their own business. I have to say the article is a content-free zone but the point it is making is an important one.

Companies that provide services and products aimed at assisting older people to run a business have a booming market that will boom even faster in the future as a result of the recession.

Marketers in financial services, franchise and business services companies should be exploiting this opportunity. Dick Stroud

New HSBC report about retirement

HSBC has published its fifth annual Future of Retirement study.

All a bit doom and gloom. The results show that nearly 9 out of 10 people are not feeling fully prepared for their retirement. I would have thought it would have been 9.9 out of 10.

The bottom line of this document is that most people are clueless about their pensions, they don’t have enough saved and have no idea how they will support themselves during retirement. What the report doesn’t say is that the same comments apply to most of the national governments.

A nice glossy report with lots of graphs etc but doesn’t tell us anything we didn’t already know. Dick Stroud

A “no frills” TV ad for 50-plus insurance

Castle Cover provides insurance for the over-50s.

The campaign manager at the company said: "We wanted to keep the advert simple and direct, and using the memorable Castle Character helped us to achieve that. The message is clear, concise, and impactful - tying in very well with our brand.” Well I think he is safe in knowing that he has achieved that objective.

The advert will be shown across a number of channels -- including Sky News, ITV2 and ITV3 -- over a period of five weeks.

With the current state of the UK TV advertising industry I bet he got a fantastic deal. Dick Stroud

Barclays launches 'brand concept' bank

This must be one of those projects that started when life was a lot better for the banks. The ‘concept branch’ is situated in 8,000 square feet of retail space over three floors in one of the UK’s most expensive locations and is stuffed full of surface technology (remember 'Minority Report') and other high tech gizmos.

I bet there are lot of worried Barclay’s marketers (all though less after the redundancies) thinking that this venture is sending all of the wrong messages to the bank’s customers who are more worried about paying their mortgage than playing with technology. Maybe Barclays is thinking of moving into the entertainment arcade business?

Sorry, I digress.

It is the way of the world that launches of ideas dreamt up in a different era emerge when life is very different. What I will be interested in seeing, when I visit the branch, is how Barclays intends to modify its branches to accommodate the ever increasing number of older people. Will it have more seats? Will it have more (some) toilets? Will the signs all be in large font? Will it be possible to amplify the cashier’s voice? Will there be large keys on the pin keyboard? Will there, will there…

Of course Barclays will not just have designed the branch for the every diminishing numbers of younger people. You know, that group who either don’t have enough money to warrant a bank or who always bank online. Surely not? Dick Stroud

The daft names are back

Back in May I wrote the phenomena of the GAUADN (Get attention by using a daft name). The name in question was FREDS - Frantic About the 'Credit Crunch', Stockmarket Volatility and Fears of Recession.

Liverpool and Victoria are still peddling this story. This time, surprise surprise, the FREDS are on the increase and they are even more worried about the economy. Might be something to do with the economic meltdown that is going on. No, that is too simple an explanation.

There are zillions of things that could be researched about the older market so why select a subject that generates obvious answers. Crazy. Dick Stroud

Ireland gives the over-50s a health subsidy

The bye-line to this article was: “Younger customers to foot insurance bill”.

It looks as if the Irish Government is planning to introduce new measures to protect older people from the scheduled hikes in private health insurance premiums that could see them paying an extra €600 a year from January.

Irish insurers traditionally charged everyone the same price for the same products, which meant the young always were subsidising older people, who make more claims on the system. All that has changed is that the extent of the subsidy is made public.

I have never agreed with the intergenerational conflict scenario but there will undoubtedly be a lot more headlines like this one. During times of plenty, nobody cared too much, but as the dark clouds of recession gather I suspect it will generate a lot more youthful angst. Dick Stroud

Muses about the Financial Services Industry

I spent the last couple of days chairing a conference about the Finance Industry and the 50-plus. I thoroughly enjoyed myself – just hope the conference attendees did as well.

The dire circumstances of the Finance Industry made the event something of a surreal experience since most of the speakers began their presentations with the words: “this presentation was created before the meltdown in the banking sector”.
Some of the speakers were now working for partly nationalised banks, some for totally different institutions and some not too sure who employed them.

I gave a pitch about the Finance Industry and the 50-plus – it is a big file (10 Mb) but is on my site for download.

When I summed up the event at the end of the final day there were 5 ‘takeaways’ that I had from the event.

1. We spend lots of time talking about the 50+ market but most of the time we are really talking about the 60+ - probably the 65+ and in many instance the 70+ market. Certainly in the Finance Industry.

2. The consumer’s property is critical to so much of their future livelihood. I know that is an obvious thing to say but it really, really, really is.

3. How little we understand about the real reasons why older people behave the way they do. So much of the time we view the older market through the corporate window of generalisations and how we would like older consumers to behave

4. There are large country differences, especially with regard to the post work finance available to people. But, there is a hell of lot in common between countries, certainly within Europe.

5. The impact of the credit crunch on consumer’s choice of channels to funnel their hard earned cash has probably changed forever. I don’t think the Financial Services industry has started to come to terms with that fact.

Another, unrelated observation. The conference was held near to Marble Arch. For non Brits, this is at the end of the busiest shopping street in the country.

The amount of shoppers around was amazing. It was horrible. People seemed to be spending money like there as no tomorrow.

Maybe this is the reaction: “Sod the future lets spend today”. I don’t know.

I had a frightening feeling that I was witnessing an unreal world that was about to get a terrible shock as it is enveloped in the looming recession. Dick Stroud

Will the IPOD generation ever trust financial services?

Answer – No.

Will the 50-plus ever trust financial services? Answer – No.

OK, never is a long time. Let’s be realistic and say for the lifetime of the average bank or insurance company marketing director and their three successors.

I doubt if the Financial Services really, really understands the mess it is in - not just financial – something that can be fixed quickly. The bigger mess is the total destruction of consumer’s confidence in its Industry Brand.

Have a read on this excellent report from Reform about the way the younger generation view the finance industry. This is a taste of what it has to say.

The industry is still mentally domiciled in the suburbs of the 1950s relating to a vanishing generation of people who are interested in lifetime savings backed with job-for-life security.

Inflexible products are presented in a complex way, yet often failing to disclose basic important information.

It is not surprising that IPODs place greater trust in friends and family rather than relying on price comparison sites or independent financial advisers, whom a third of IPODs think are out of touch with younger generations.

Am I over stating the issue? Will the banks, insurance and investment companies quickly regain a place in our hearts? I think not.

I have included an interesting bit of analysis from the report. Something that marketing managers who target the IPODs might like to ponder upon. Dick Stroud

Equity release ads from Prudential

The press ads target what Prudential and its agency (Tequila) claim is the primary motivator for those considering equity release: to allow them to spend a more comfortable retirement without having to leave the homes that they love.

The aim is to drive traffic to the website.

One ad uses the symbol of a swing, which is painted into a picture of a garden in the same red brush strokes used in Prudential's logo, with the copy: "We've got great plans for the garden in our retirement. Move? Not a chance."

A long copy advertorial will support the message alongside ongoing direct response activity.
Well good luck mates. I would think that as older people look at the size of their pensions implode and the value of their property in free-fall, the last thing they would want to do is add even more uncertainty with a reverse mortgage.

What Prudential must guard against is that because of the current economic circumstances, its customers are older people in distressed circumstances, who need their reverse mortgage to pay for essentials, not luxury holidays and new cars. I am sure the company is well aware of this risk.

I think I would have pulled the campaign. Dick Stroud

Debt and the over-50s

Any research from an organisation, with a vested interest in the subject, has to be viewed for what it is: “something to grab press coverage”.

Payplan, describes itself as the UK’s leading provider of free debt solutions and states that there is a growing problem with indebted ‘pre-retirees’ (aged 50-60) who have average unsecured debts of £41,400. This is 25% higher than the average unsecured debts of other age groups (£32,700).

Not only are ‘pre-retirees’ in significantly more debt that other age groups but it also takes them longer to pay back this debt: their average repayment term in a debt management plan is 11 years, compared with 9 years for other groups. This gap has increased by 27%, suggesting that debt for ‘pre-retirees’ is a growing problem.

Since this research was done before the current round of market turmoil, one can only assume things are going to get worse.

Clearly there are some, probably a lot, of the 50-plus who are not too bright in handling their financial affairs. However, the older age group is sitting on a pile more housing equity than the young. Every day that goes by, more young people will drop into negative equity. That's bad, but its impact on their willingness to spend, will a real nightmare for companies.

We are in for a monsoon of doom and gloom stories. We need to be on our guard to distinguish between the real and manfactured stories. Dick Stroud

Reverse mortgage (equity release) doing badly

I am not sure how it is doing in the rest of the world but in Australia the reverse mortgage market is in full-scale retreat. The fourth lender this year announcing that it is pulling back.

ABN Amro is still in the market but has admitted that conditions were tough. A spokesman said – the quote is taken from The Sheet (subscription only):

“Because of rising interest rates the lifestyle borrowers have disappeared. These are the people who don’t need the money to buy a new car or repair the roof but would like some extra money for travel or to improve their quality of life in retirement in other ways.

“What makes this market tough is that the payback on a reverse mortgage is very long term. Figures from the US and Europe show that the average life of a loan is seven or eight years.

“You get no cash flow during those years and you have to cover set-up costs and commissions. Securitisation gives you some cash but that’s not an option now.”

So companies selling these products to the older market are getting hit both by a decline in demand and the inherent long term nature of the business. I guess that high interest rates and lack of wholesale market liquidity doesn’t help.

I still think that this will be a fantastic long term business opportunity, because for a lot of people it will not be a 'lifestyle' choice but a necessity, but looks like success will be delayed for a while. Dick Stroud

The Great geographic divide

Your chances of surviving cancer in the UK are a much better if you live in the south than up in the cold frozen north. There are a host of reasons, many of them to do with the attitude of people to illness and relative wealth. The fact remains that the distribution of cancer incidences is not surprising. London and the South of England having a younger population. But the chances of surviving are anything but related to age.

So it is not surprising that insurers are offering higher annuity rates (amount of pension paid) to those who live in poorer areas.

These “postcode annuities” are used by insurers to set different rates for annual pension plans according to location. Customers who live in neighbourhoods where the average life expectancy is statistically below average can receive better rates.

Now this raises some interesting questions about how long you have to live in the area. I would have thought this pricing mechanism was open to fraud. Hopefully the insurance companies have done their homework otherwise I can see there being a lot of older people renting properties in down-town Manchester at the time of arranging their pension. Dick Stroud

New TV ads from RIAS

RIAS is a smart company. It has kept a focus on the 50-plus market – employed very functional and effective advertising and as a result taken a large chunk of the car insurance market. As testimony to its success a lot of other companies have attempted to follow the same creative approach.

The company has just launched a new ad campaign around the theme: “better with age”.
What a pity the company’s web site doesn’t contain the ad, however, it does anticipate the TV generated traffic and have a dedicated landing page. As soon as I can get a copy of the ad I will post a review. Any RIAS employees reading this and want to send me the ad? Dick Stroud

UK research about pensions

The figures published by the Office of National Statistics about UK pension trends make sobering reading. About two thirds of pensioner households received private pension incomes in 2005/06, but 40% of pensioner couples, 55% of single men and 61% of single women pensioners have an annual private pension income of less than £1,000.

The figures show that the average annual private pension income for pensioner couples in 2005/06 was £2,115 for pensioner couples while for single men it was £1,553 and for single women £1,238.

To be honest we have always known that income distribution of people of pensionable age is just as fragmented into the ‘haves’ and the ‘have-nots’ as any age group, more so maybe. This is why it is essential to be rigorous with the way you segment the market.

Marketing magazine had a great article about this subject. The fact that I am quoted hasn't influenced on my judgement. Well maybe a tad. Dick Stroud

Borrowers approaching retirement owe four times as much as 10 years ago

A new study by Help the Aged and Barclays has revealed that 25% of people are approaching state retirement age with outstanding consumer credit commitments, owing four times as much as their counterparts did ten years ago.

Credit levels are on the increase across all age groups and Help the Aged is concerned about the impact this will have on pensioner poverty as new retirees face the double whammy of living on a fixed income while managing existing credit commitments. The report shows that unlike borrowers in other age groups, older people use credit cards to cover essentials such as the costs of bills or even to buy food.

Half of households headed by someone in their 50s, one in eight over 60s (over 1.5 million) and 4% of people aged 80-84s (about 60,000) are still repaying a mortgage.

None of this should come as a surprise. For the last couple of years I have been reporting that the fastest growing group of people seeking advice about debt problems are the 50-plus. Things are only going to get worse. Dick Stroud

Catch the Charmed Generation whilst you can

The Sunday press contained a couple of scary articles.

The first concerned the increase in selling equity release schemes to people as young as 55.

The argument goes that because of the credit crunch and the level of indebtedness, people are needing to cash-in on the equity in their property much earlier than is financially sensible. In truth this has been happening for a while with people taking on second mortgages to fund current expenditure. Great as long as house pricing go up – disaster when they come down.

Stonehaven was the first to make a big splash in the fiftysomething market when it set up for business 18 months ago. It allows 55-year-olds to release up to 12 per cent of the value of their property as cash and then charges interest on this at 5.9 per cent, fixed for life. You can choose either to pay that interest as you go along or never pay any of it and let the whole debt roll up and be paid off when you die. Basically the kids watch their inheritance do a slow waltz out of the home into Stonehaven’s bank account.

Don’t get me wrong. I am no knocking Stonehaven or any other company operating in the equity release business. The only (just say that again) the only way that a large chunk of the 50-plus will be able to fund their retirement is by releasing the value of their properties. Somebody has to provide the financial instrument to enable that to happen. Whether it is the right thing for an individual to buy is another matter.

This brings me on to one of the causes of the problem. The lack of sufficient pension provision.

The Telegraph had an article titled: Private pensions take-up drops to one in four.

A report, from Policy Exchange shows that only one in four of Britain's 26.2 million employees have a private pension in addition to the basic state pension. This represents a sharp fall from 1991-92, when 39 per cent of workers were putting money aside for later life.

Taxpayers are struggling to save for their own pensions, while the annual burden of contributing to public sector pensions is predicted to rise by 33 per cent by the 2030s.

Only 15 per cent of private sector employees are now in final salary schemes and a mere four per cent are in schemes still open to new members.

Final salary schemes - where the pension is based on length of service and salary - are being replaced by money purchase schemes where the value of the pension is dependent on how much the employee and the employer put into the fund.

Yet the total of employers' and employees' contributions to the average money purchase scheme is only 9% of income which is not enough to build a decent sized pension.

Do you see the symmetry of all of this? Not enough pension – only asset the home – leads to earlier and earlier release of home equity.

The Charmed Generation (the 2.5 million wealthy 50-plus) are truly a dying species. Better start marketing to them before it is too late. Dick Stroud

That’s financial services for you

Whenever I attend a 50-plus focus group and the topic of banks, building societies and other variants of financial service companies are discussed I can guarantee there will be a huge intake of breath and then tidal wave of vitriolic abuse.

Recently I did some research looking at the 50-plus’s reaction to different types of advertising creative. The ads from financial services companies had to be dropped from the sample because the viewer’s reaction was not about the brand and the creative but the category – shysters and schmucks would be a glowing way of putting it.

Now I read that in the UK there are 27 accounts restricted to senior savers – but they can all be beaten by non-age specific competitors. A quote from the analyst who did the research:

"Accounts restricted to senior savers have been market leaders in the past. However, the eagerness of many providers to attract retail funds at the moment means that – without exception – the over-50s-only savings products can be beaten by products without such age-related restrictions."

Anybody from the Financial Services listening? Dick Stroud

ING Direct - good use of Web video

It is great to see a large financial services company start using Web video. ING Direct, one of the world’s largest online banks, uses this video – prominently shown on the home page – to provide customer testimonials. OK, you can argue about the style but I reckon it is pretty good. Notice anything about the age of the ‘customers’? Dick Stroud.

€327 doesn’t buy you many pints of Guinness

Research in the Green Paper on pensions, issued by the Irish Government, found that the average net income for pensioners in 2005 was €327. The average weekly income for all households was more than double this at €776. Less than half.

Allied Irish Bank has done its own research that concludes that over 50% of the 50-plus has no private pension and will be forced to rely on the State to pay for their retirement.

These dreadful figures are not that much different from the UK. So much for a land of affluent Baby Boomers. Dick Stroud

The UK's over-60s own £841 billion in housing equity

Norwich Union is a provider of financial services and equity release (reverse mortgages).

It has just published some research that quantifies the amount of housing equity owned by the 60-plus.

This staggering amount of money equates to a grand total of £82,446 each. This figure seems on the low side. I suspect that they have divided £841 billion by the total number of over-60s not just the number of home users.

The research also showed that 68% of the over-60s would never consider selling their homes.

Of the remaining respondents, 26% would only consider finding a new home if life-changing events such as a partner's death, decreased mobility or a move into long-term care occurred. However, as revealed above, a small number of over-60s (6%) did say they would consider selling their property to release money. Interesting stuff. Dick Stroud

Factlet about the UK’s savings and insurance market

There has been a bevy of facts and figures published this week about the 50-plus and finance.

Not sure what you can do with them but here they are:

1. People in their pre-retirement years have the highest average value of savings (£10,338).

2. Retired people hold an average of £9,450 of savings.

3. The 35 - 54 year olds only have an average savings of £7,697.

4. 16% of new savings accounts were taken out by the retired

5. In general insurance products, Age Concern, RIAS and SAGA have an 18% share of the over 50s market -which equates to an 11% share of the total market.

6. Only 5% of customers at these brands are considering switching away in the next 12 months, compared to 9% of the market.

A couple of comments. Don’t forget averages are next to useless numbers. In all age groups there will be a few with mega bucks and a lot with very little. I am surprised that the combined market share of the three big 50-plus companies is so low (18%) – I would treat that number with caution. Dick Stroud

Maybe Generation Y is not that different

I have a Google alert that picks up content related to Generation Y and X. It is surprising how little is published about either group.

An article appeared in MediaPost’s Marketing Daily about the way banks are failing to meet the expectations of Gen Y.

If you do a global search and replace on the article and swap Gen Y for Boomers I bet you would still read the article and nod in agreement.

This is says one of two things. Perhaps my thoughts about age neutrality have broader application or maybe it is because marketing journals publish such nebulous rubbish that can apply to anybody. Now I know what happens to marketing journalists when they retire – they write horoscopes. Dick Stroud

The heard mentality of financial institutions

You can picture the situation. It is a training course being given by some hot-shot marketer to a bunch of bright eyed and bushy tailed brand managers from a financial services company. The PowerPoint slide is titled “The 3Gs”.

In a hushed voice the marketing guru claims that they are about to see the biggest marketing weeze of 2007. This, he claims, will enable the re-birth of the audience’s mesmerically boring savings and loan accounts.

The slide slowly builds and the two words appear. First the word ‘grey’ then ‘green’.

The guru explains: “All you need to do is to slap ‘50-plus’ or ‘green’ on your existing products”. Why he asks can such an obvious trick work? Slowly the third word appears – Gullible. He sniggers to the audience that the poor old and eco-guilty punters are so dim they will genuinely think there is something special about these products.

Customers, he says, are falling over themselves to buy products with the word green in the product name or that are coloured green. It is the same with making your customers think that being 50-plus confers some right to buy an extra competitive product.

The guru concludes the presentation and moves speedily to the next client and gives exactly the same presentation.

This tale is the only explanation I can think to explain the heard mentality of UK Financial Institutions, 36 of which are offering specialist accounts for the over-50s market. It is slight less for the number providing eco-friendly accounts. As this article explains, in most cases an over-50 can get a better deal buying a product that is available to all ages. Maybe the word ‘gullible’ applies to both the institutions and their target market. Dick Stroud

The mismatch between strategic and tactical marketing

Why did HSBC and Axa spend a shed load of money researching the 50-plus market? Don’t get me wrong – I am not critical of companies taking an interest in the older market – I encourage them to do so. What I don’t understand is why this research appears to have so little impact on their tactical marketing.

I spend a lot of time studying this market and I rarely hear about these two companies or notice references about their research. Why is this?

I suspect, and it is no more than a suspicion, that somebody on-high with HSBC and Axa thought it was a good thing to do. The money was spent, the research completed and the glossy marketing comms materials produced.

Down at the coal face of marketing the troops were unaware, unprepared or disinterested in this gift that corporate marketing/research delivered.

So there it sits in a state of digital decay. No doubt somebody will tell me how wrong I am. Dick Stroud

BrandChannel.com are featuring Boomers

BrandChannel decided it was about time it did a feature on Boomers. If you know anything about the Boomer / 50-plus market you aren’t likely to learn very much. Lots of broad sweeping statements and the usual splattering of Boomer facts and examples.
Home: They're getting older, but the Baby Boomers remain a booming market.
Features Profile: Can Ameriprise grab the older Boomer market from older financial services brands?
Papers: Can your brand attract the wired Baby Boomer?
Brandcameo: Brands rise in Fantastic Four: Rise of the Silver Surfer.

Mary Furlong’s paper about the ‘wired’ Baby Boomer is worth a read although I was surprised how little mention it made about Web video. I have seen estimates suggesting that video will take 98% of all Internet bandwidth in the next 24 months so it is something you cannot ignore. I think it will be the biggest revolution to hit the web in a decade and will especially change the way companies communicate with older audiences.

But I am not complaining. Anything that is likely to dent the prejudices of the marketing world to take more account of the older consumers has to be a good thing. Dick Stroud

Good videos boring web site

The press release reads: “Financial professionals, journalists and consumers can now access the most comprehensive source of information regarding solutions to the Baby Boomer retirement crisis”.

This ‘most comprehensive’ Web site is hosted by the Million Dollar Round Table (MDRT) - The Premier Association of Financial Professionals (so it says)

Well guys I cannot agree with your claims but you do have some really good stuff on the web site, especially the videos of the conference sessions. I wish all organizations would publish their conference proceedings in this way.

Surely you could have come up with a more enticing and professional looking web site. Dick Stroud

'Bank of Mum and Dad' lend £18,000 on average for first homes

Nearly a third of potential first-time buyers (31%) anticipate financial help from their parents, according to new research commissioned by the Council of Mortgage Lenders. But even more (35%) say that they would need financial help to be able to enter the housing market.

Among all of those who are already home-owners, 23% say that their parents helped them. But for younger, more recent buyers, the figure is much larger. 39% of those aged under 30 had received help, and more than 40% of those who have entered the market since 2004.

I wonder if mortgage lenders have taken on board the implications this research. The over-50s are clearly an important part of the decision making process about sources of finance when their kids buy a house. Dick Stroud

A fine line between marketing and insulting

Should a product that this claimed to be designed for the 50-plus be better than one that is available to Joe Public? There are no rules that say that they must, but you leave yourself open to hostile criticisms if they are aren’t.

This article in the Telegraph looks at a range of financial products and compares the 50-plus vendors (Age Concern, Saga, RIAS and intune) against non age-related vendors. In nearly all cases it found the 50-plus vendors did not provide the best deal.

It is now so simple to compare financial products using the Web that I think those claiming specialist 50-plus products need to be very careful if they are not providing something of real value. There is a thin line between reasonable marketing behaviour and insulting your potential customers’ intelligence. Dick Stroud

AXA Equitable Retirement Scope

This is a document for the library. AXA has been conducting a worldwide study of attitudes to retirement for the past 3 years.

This 120 page report shows the results for the United States, with international comparisons. Lots of good stuff. Dick Stroud

Wealth of Over-50s Reaches Record Levels

The UK finance company, Abbey National, has its research covered in a couple of UK publications. The most detailed is in The Finance Daily.

Why I am not surprised that Abbey makes no mention of this research or provides any links on its own web site. I despair at the way companies have yet to wake up to the new world of news dissemination and the opportunities of bloggers.

Here are a few of the factlets from the research:

The wealth of the over-50s generation has rocketed 45.6 per cent in the past five years to in excess of five trillion pounds (£5,000,000,000,000)

The personal wealth of this demographic is greater than the annual GDP of every nation except the USA. It is even greater than the combined GDP’s of Germany, UK and France.

The over-50s owns nearly 75 per cent of the UK’s wealth. They hold 60 per cent of all savings and are responsible for over 40 per cent of all consumer demand.

OK, OK I think we have got the picture. They have lots of dosh. Tell us something we don’t know. Dick Stroud

Let’s hope Help the Aged really is intune with the market

Help The Aged is to sell home insurance and other financial products to the "grey market".
The charity is to set up a financial services arm, Intune, selling insurance products (e.g. travel, home and motor insurance)

The charity hopes the £5m venture with insurer Liverpool Victoria will aim to be profitable within three years.

"Many companies are guilty of lumping the over 50s into one amorphous 'grey' market and being inflexible or discriminatory with their products and services," said Anne Grahamslaw, Intune's managing director. You cannot argue with that!

Well Intune has been fortunate in having a real life case study of how not to appeal to the 50-plus market, with the Heyday disaster, so let’s hope it has learnt some of the lessons.

I just wonder if mixing charities with commercial ventures is fundamentally flawed. Time will tell. Dick Stroud

Freetirement nation is the envy of Generation X

This blog posting covers three subjects linked together by the word ‘unprofessional’.

Friends Provident (UK Financial Services Company) recently published some PR-research containing the two mandatory bits of content:

1. Headline grabbing statements (i.e. “the baby boomer generation have achieved a form of perfect work/life balance that Generation X strive for but may never afford”).

2. Silly name (“The Freetirement Generation”)

The report’s press release doesn’t contain (as far as I know) any inaccuracies, it is what it doesn’t contain that matters. No mention of the significant (maybe the majority) of the age group who are not so financially fortunate. No mention that very soon the over-60s will be the largest group of people seeking advice about debt problems. This is an unprofessional selective garnering of the facts for a few cheap headlines.

The second unprofessional factor concerns not answering e-mails. I approached Friends Provident on two occasions to send me a copy of the report. I am still waiting to receive it. Not good.

The third unprofessional action concerns the web site that Friends Provident has created for the Freetirement Generation. Words fail me – they even included a photo of a guy with a surf board! Why oh why do people think that ageing results in a passion for aquatic activities!

Not a good start to Friend Provident’s 50-plus marketing efforts. Dick Stroud

Funky Hartford Stag?

The Hartford Financial Services Group, a really big US financial services and insurance company is launching a new marketing campaign encouraging Baby Boomers to “Prepare to Live” in retirement.

“Times have changed,” said Ann Glover, chief marketing officer for The Hartford. “Workers know they cannot depend on social security benefits, defined pension programs or retiree health benefits to fund their retirement, and are unsure about their ability to pay for rising health care costs in retirement. Through this campaign, we are encouraging Baby Boomers to understand their personal financial picture and goals and take control of their financial future. By seeking education and facts about their own situation, they can prepare with confidence for what should be one of the most rewarding times in their lives – their retirement.” So now you know.

Same Stag, but now using computer-generated imagery. Does it work for you? Dick Stroud

Enough with baby-boomer predictions

This a grumpy lady. I have to say that I share many of her irritations.

Here is a sample: “I would rather watch cartoons on Nickelodeon than one more television stint of Dennis Hopper’s beach commercial telling us that we are not living our parents’ retirement. Dennis, after all, at age 70, should more properly be selling to our parents anyway”. And so it goes on. Dick Stroud.

Eons raises more money

Eons, the “50- plus media company for loving life on the flipside of 50” today announced $22 million in new financing.

Interestingly, the press release makes no mention of visitors, visitor growth, revenue, profit forecasts, impressions…….

Still, Eons must be doing a lot of something to convince the VCs to stomp up another $22 Million. Dick Stroud

Another ‘exclusive’ discount for the over-50 (ish)

Amongst the pile of stuff that fell out of my Economist magazine this week was this item from Standard Life.

Good to see that one of the stalwarts of the British Finance industry is targeting the 50-plus. Not the most eye-watering creative I have ever seen but it does the job. Dick Stroud

RIAS gets a new agency

I bet the staff at Watson Phillips Norman are celebrating having just won the £10m customer acquisition and retention and brand development account for over-50s insurer RIAS as sole agency.

RIAS, established in 1992, has been leading the way (after SAGA) in capturing the over-50s insurance for home, motor, travel and pet insurance and now has over 880,000 customers.

It will be interesting to see how the RIAS brand develops – well at least we know who to blame or congratulate. Dick Stroud