1 00:00:00,985 --> 00:00:04,505 Welcome to the Market Pulse podcast from Equifax. I'm your host, 2 00:00:04,684 --> 00:00:07,025 Tom O'Neill, senior advisor with Equifax, 3 00:00:07,675 --> 00:00:11,865 where we look out onto the macroeconomic and credit environments to see how they 4 00:00:11,885 --> 00:00:15,065 impact financial institutions and American households. 5 00:00:15,365 --> 00:00:20,025 We focus on helping clients navigate economic uncertainty while identifying 6 00:00:20,026 --> 00:00:22,785 opportunities for growth in the consumer credit space. 7 00:00:23,565 --> 00:00:28,345 I'm thrilled to be joined today by Ian Wright, chief Strategy Officer for IXI. 8 00:00:28,845 --> 00:00:30,425 As leader of the IXI network, 9 00:00:30,985 --> 00:00:35,585 Ian leverages data on more than $30 trillion worth of consumer deposits and 10 00:00:35,586 --> 00:00:40,145 investments to help financial services to help financial service 11 00:00:40,215 --> 00:00:43,104 marketers with their most challenging needs. 12 00:00:43,675 --> 00:00:47,945 Today we're gonna be discussing trends in wealth post COVID and how those 13 00:00:47,946 --> 00:00:52,345 differing trends impact consumers and what financial institutions need to know 14 00:00:52,346 --> 00:00:54,265 about it. But before we get started, 15 00:00:54,475 --> 00:00:58,025 let's get a quick economic update from our friends at Moody's. Analytics. 16 00:00:58,795 --> 00:01:02,425 Trade deals are all the rage right now as the Trump administration's August 1st 17 00:01:02,685 --> 00:01:04,345 tariff deadline looms. 18 00:01:04,575 --> 00:01:07,825 Several agreements have been struck in the lead up to the deadline, 19 00:01:07,826 --> 00:01:10,145 including with Japan and the European Union, 20 00:01:10,435 --> 00:01:15,025 which will each face a 15% import tax and pay no tariff on US 21 00:01:15,175 --> 00:01:17,865 exports heightened uncertainty from US. 22 00:01:17,866 --> 00:01:20,785 Trade policy has weighed on hiring and production, 23 00:01:21,205 --> 00:01:25,745 but cemented trade agreements will clear the fog going forward within the US. 24 00:01:25,875 --> 00:01:29,345 Price pressures from higher tariffs have been muted so far, 25 00:01:29,405 --> 00:01:30,505 but are starting to emerge. 26 00:01:31,005 --> 00:01:34,425 The consumer price index rose 0.3% in June, 27 00:01:34,944 --> 00:01:37,145 bringing the year ago rate to 2.7%, 28 00:01:37,146 --> 00:01:41,825 which is up from 2.4% in the previous month, core CPI, 29 00:01:41,826 --> 00:01:44,785 which excludes food and energy rose 0.2%, 30 00:01:44,845 --> 00:01:49,625 and the annual rate increase from 2.8% in May to 2.9% in 31 00:01:49,626 --> 00:01:50,745 June. Now, 32 00:01:50,746 --> 00:01:54,825 some of the increase in the annual inflation numbers in June were due to 33 00:01:54,895 --> 00:01:59,265 unfavorable base effects, as inflation was soft at this point last year. 34 00:01:59,925 --> 00:02:03,705 But certain tariff sensitive goods, like household appliances, for instance, 35 00:02:03,925 --> 00:02:08,705 showed a meaningful increase in prices as results of firms 36 00:02:08,706 --> 00:02:13,305 passing down higher costs from import taxes to consumers. 37 00:02:14,125 --> 00:02:15,985 Now, tariffs are altering consumer behavior. 38 00:02:16,415 --> 00:02:20,665 Many consumers front loaded purchases earlier in the year to get ahead of 39 00:02:20,865 --> 00:02:25,185 expected tariff increases as sales then plummeted in May as tariffs rose and 40 00:02:25,186 --> 00:02:29,745 forward buying ended before partially rebounding in June. But nonetheless, 41 00:02:30,044 --> 00:02:33,985 retail sales are only a touch above December levels in the aggregate. 42 00:02:34,805 --> 00:02:38,505 As consumers feel the force, the tariff induced price increases, 43 00:02:39,095 --> 00:02:41,264 they will pull back on spending even more. 44 00:02:42,595 --> 00:02:45,345 There is pressure on the Fed to start easing monetary policy, 45 00:02:45,405 --> 00:02:46,985 but with inflation proving stubborn, 46 00:02:47,275 --> 00:02:49,825 there appears to be little appetite to cut rates. 47 00:02:50,245 --> 00:02:54,505 The Fed has to strike a balance between stable prices and maximum employment, 48 00:02:54,735 --> 00:02:59,065 both of which can be simultaneously undermined by tariffs. However, 49 00:02:59,215 --> 00:03:02,725 since tariffs generally represent a one-time price shock, 50 00:03:03,065 --> 00:03:07,325 it seems likely that the Fed will prioritize the labor market as growth slows. 51 00:03:07,675 --> 00:03:08,305 Therefore, 52 00:03:08,305 --> 00:03:13,044 we anticipate 2 25 basis point cuts this year in September and 53 00:03:13,525 --> 00:03:14,358 December. 54 00:03:14,685 --> 00:03:18,915 Thank you, Moody's. So, Ian, welcome. Thank you for joining us today. 55 00:03:19,365 --> 00:03:22,514 Thank you. Great to be here. Tom, always great to have a conversation with you. 56 00:03:22,625 --> 00:03:26,435 Yeah, I always enjoy our conversations and, but this one's being recorded, 57 00:03:26,535 --> 00:03:31,035 so we have to watch what we say . I wanted to start off by, 58 00:03:31,495 --> 00:03:35,675 by bringing up the, the wealth trends reports that, 59 00:03:36,225 --> 00:03:41,195 that Equifax is just releasing based upon the IXI data that 60 00:03:41,275 --> 00:03:42,635 I mentioned in the, the intro. 61 00:03:43,195 --> 00:03:47,995 And that report highlights pretty significant wealth growth since the 62 00:03:48,015 --> 00:03:50,675 2008 recession. It's the, 63 00:03:50,735 --> 00:03:54,355 the growth has actually reached 66 trillion, you know, by, you know, 64 00:03:54,356 --> 00:03:57,995 by the middle of last year, I think it was. What really are the, 65 00:03:58,015 --> 00:03:59,955 the primary drivers of that growth? 66 00:04:00,985 --> 00:04:04,635 Yeah, it's been a, a fantastic decade and a half for consumers, 67 00:04:04,636 --> 00:04:05,356 but as we'll see, 68 00:04:05,356 --> 00:04:09,235 maybe that's been a little uneven depending upon who you are and where your 69 00:04:09,475 --> 00:04:11,435 economic and financial capabilities exist. 70 00:04:12,156 --> 00:04:16,755 But it's really been the stock market that has been fueling wealth especially 71 00:04:16,825 --> 00:04:21,035 post COVID. Just between 2001 and two thou, sorry, 72 00:04:21,055 --> 00:04:25,035 2021 and 2026 total 73 00:04:25,955 --> 00:04:30,154 consumer assets went up by $6 trillion. So six of that six, 74 00:04:30,295 --> 00:04:33,875 $6 trillion million occurred just in the last five years. 75 00:04:33,935 --> 00:04:36,875 So about 9% growth even just recently. 76 00:04:38,925 --> 00:04:43,605 Wow. That's, and, and obviously since it's, since so much of that has, 77 00:04:43,705 --> 00:04:46,005 has happened within the, the stock market, 78 00:04:47,205 --> 00:04:52,005 I would imagine that it hasn't quite benefited all households, you know, 79 00:04:52,006 --> 00:04:55,404 equally across that can you give a, I know we, 80 00:04:55,464 --> 00:04:58,645 we can certainly go really deep into this conversation and, 81 00:04:58,705 --> 00:05:02,525 and probably will but what, what, 82 00:05:02,795 --> 00:05:07,165 what are the different segments that have been influenced differently by this, 83 00:05:07,275 --> 00:05:08,445 this growth and wealth? 84 00:05:09,265 --> 00:05:11,605 The growth has been interesting, as you said. 85 00:05:11,785 --> 00:05:16,605 So I looked at where were consumers in 2021 and and where were they 86 00:05:16,606 --> 00:05:17,805 In 2024, 87 00:05:18,565 --> 00:05:23,365 I saw what I call the typical consumer household looking at the median household 88 00:05:23,846 --> 00:05:26,525 using medians instead of means or averages. 89 00:05:26,945 --> 00:05:31,045 So we don't have those very wealthy people kind of pulling up and skewing the 90 00:05:31,046 --> 00:05:31,879 picture a bit. 91 00:05:32,225 --> 00:05:36,805 But even though wealth increased by five or $6 trillion during that period, 92 00:05:37,305 --> 00:05:38,245 the median value, 93 00:05:38,265 --> 00:05:42,725 the median household value for wealth actually decreased to $66,000. 94 00:05:43,755 --> 00:05:48,005 Investments went down by 12%. Deposits stayed about even. 95 00:05:48,464 --> 00:05:50,765 So then you kind of have this conundrum, right, well, 96 00:05:50,766 --> 00:05:53,565 how did wealth increase overall mm-hmm . 97 00:05:53,725 --> 00:05:55,125 But then how did the typical consumer 98 00:05:56,725 --> 00:06:01,085 actually be worse off during that experience? And it's, as you said, 99 00:06:01,145 --> 00:06:06,005 the growth hasn't been even we look at consumer wealth in 100 00:06:06,006 --> 00:06:09,645 three different tiers. If you look at the middle tier, 101 00:06:09,646 --> 00:06:11,085 which is the mass affluent, 102 00:06:11,275 --> 00:06:15,885 they have a hundred thousand dollars to a million dollars in total deposits and 103 00:06:15,886 --> 00:06:16,719 investments. 104 00:06:17,075 --> 00:06:20,964 That segment consists of about 44 million households, 105 00:06:20,985 --> 00:06:23,404 and it reduced by about 4%, 106 00:06:24,035 --> 00:06:28,845 both in the number of households that are in the segment and also by the 107 00:06:28,846 --> 00:06:33,005 number of assets that it controls. Now, where did those households go? 108 00:06:33,195 --> 00:06:35,845 Most of them went down to what we call the mass market, 109 00:06:35,855 --> 00:06:39,205 which have less than a hundred thousand dollars. Wow. That segment, 110 00:06:39,295 --> 00:06:41,765 which is about 75 million households, 111 00:06:42,525 --> 00:06:45,765 actually increased by 7% in household counts, 112 00:06:46,065 --> 00:06:48,685 but only 1% actually in assets. 113 00:06:49,385 --> 00:06:52,805 So we see that middle tier actually going down, 114 00:06:52,945 --> 00:06:56,125 but not contributing to the wealth when it did go down in wealth. 115 00:06:56,985 --> 00:06:59,725 On the other end of the spectrum is we do have a good story, 116 00:06:59,726 --> 00:07:02,205 and this is where the growth does occur, 117 00:07:02,785 --> 00:07:04,765 and that's with the affluent households. 118 00:07:05,086 --> 00:07:06,685 If you're someone who has a million dollars, 119 00:07:07,035 --> 00:07:10,365 your wealth probably grew over that five year, or I'm sorry, 120 00:07:10,645 --> 00:07:12,885 that four year period. In fact, 121 00:07:12,985 --> 00:07:17,685 the 14 million households that they're in that segment they grew their assets by 122 00:07:18,005 --> 00:07:20,885 17%. So when we're talking about growth, 123 00:07:20,975 --> 00:07:25,445 we're really looking at that sliver of households in the us right. 124 00:07:25,446 --> 00:07:27,765 And they hold nearly three quarters of all the wealth. 125 00:07:29,035 --> 00:07:31,925 It's, it's interest, what you're describing people, 126 00:07:32,805 --> 00:07:37,125 a a large movement moving out of the, the middle tier, 127 00:07:37,126 --> 00:07:41,285 essentially a lot moving down. I would imagine some moving up into the, 128 00:07:41,665 --> 00:07:44,045 and that middle tier, the, the mass affluent, 129 00:07:44,245 --> 00:07:47,405 you essentially shrieking shrinking over that time period. 130 00:07:47,795 --> 00:07:51,965 It's fascinating because that's exactly what we've seen in the credit side 131 00:07:52,845 --> 00:07:56,325 of, of the, the world as well, obviously here at Equifax. You know, we, 132 00:07:56,625 --> 00:08:00,685 we have a ton of, of credit data that we're constantly sifting through and, 133 00:08:00,686 --> 00:08:02,405 and looking for, for meaning within. 134 00:08:03,465 --> 00:08:07,365 And we've seen a lot of that same type of, 135 00:08:07,785 --> 00:08:10,925 of circumstance. You know, we've, we've been referencing the K shaped 136 00:08:12,705 --> 00:08:16,605 for probably the, the same four or five years that, that you're talking about. 137 00:08:17,025 --> 00:08:21,405 And we, we reference it both in terms of economic terms as well as credit terms. 138 00:08:21,825 --> 00:08:25,925 And essentially what that is, it's, 139 00:08:25,926 --> 00:08:29,685 it's as simple as it sounds, you know, envision a k you know, you've got, 140 00:08:29,905 --> 00:08:34,245 you know, a k with a, you know, perpendicular line, 141 00:08:34,246 --> 00:08:35,885 and then you've got one, you know, 142 00:08:35,915 --> 00:08:40,045 line shooting upwards and one line shooting downwards. It's as, 143 00:08:40,145 --> 00:08:44,565 as simple a visualization as that. And it, it represents that, 144 00:08:44,566 --> 00:08:48,565 that that trend of a lot of households, 145 00:08:48,645 --> 00:08:52,845 a lot of consumers thriving, doing just fine. Thank you very much. 146 00:08:53,625 --> 00:08:56,565 And then others that are, that are truly struggling, 147 00:08:57,585 --> 00:09:01,684 and certainly that's, that's always the case, you know, from the dawn of time, 148 00:09:01,685 --> 00:09:04,445 that's always been the case where you have your haves, your have nots. 149 00:09:04,585 --> 00:09:08,405 What's particularly interesting over the last few years is how much that gap 150 00:09:08,406 --> 00:09:10,205 between those populations has grown. 151 00:09:11,485 --> 00:09:12,318 You, you mentioned. 152 00:09:12,605 --> 00:09:16,085 You, you mentioned the, the, the differences in terms of wealth growth. 153 00:09:16,665 --> 00:09:20,165 We see it in terms of things as simple as credit scores. Mm-Hmm . 154 00:09:20,205 --> 00:09:23,804 You know, we have a lot of people that were in those mid-tier credit scores. 155 00:09:24,715 --> 00:09:28,125 Some of them certainly have moved up over the last years, a few years. 156 00:09:28,605 --> 00:09:32,125 A lot of them have moved down and, and fewer left in the middle. 157 00:09:32,195 --> 00:09:35,045 It's a very interesting phenomenon that we're, we're seeing. 158 00:09:35,875 --> 00:09:39,085 Yeah. I, I term now, since we're a couple years past COVID, 159 00:09:39,225 --> 00:09:41,045 I'm starting to use the barbell effect, right? 160 00:09:41,046 --> 00:09:44,765 And that's another term a lot of virtual services folks use, but it's true. 161 00:09:44,785 --> 00:09:48,325 You're seeing the middle kind of disappear and you're either unfortunately 162 00:09:48,326 --> 00:09:52,565 moving down or you're being able to benefit and move up either in wealth or it 163 00:09:52,566 --> 00:09:55,285 sounds also like in your credit behavior as well. 164 00:09:55,865 --> 00:09:59,205 So, Ian, you, you spoke of, of investments, you know, 165 00:09:59,355 --> 00:10:03,804 clearly being a fueling factor of, of this, this growth that we've seen in, 166 00:10:03,805 --> 00:10:05,045 in wealth over the last few years. 167 00:10:05,665 --> 00:10:10,565 How has that also compared to to deposits 168 00:10:10,585 --> 00:10:13,325 to CDs and other forms of, of wealth that, 169 00:10:13,355 --> 00:10:17,804 that our financial institution lenders you know, are, are looking at these days? 170 00:10:18,715 --> 00:10:22,804 Yeah, if we, if we stick to just liquid investments, so those are, I'm sorry, 171 00:10:22,805 --> 00:10:26,684 liquid assets. So those are assets that I can turn into money very easily. 172 00:10:26,865 --> 00:10:30,165 So it would be a deposit account or an investment account, right? 173 00:10:30,195 --> 00:10:34,965 It's also what a financial services marketer could try to target and bring into 174 00:10:34,966 --> 00:10:36,445 their own institution. 175 00:10:37,285 --> 00:10:41,485 We've actually seen deposits remain somewhat flat over that same time period, 176 00:10:41,486 --> 00:10:45,405 that three to four year time period and actually went down by a trillion 177 00:10:45,406 --> 00:10:47,005 dollars. So it was that 15 trillion, 178 00:10:47,545 --> 00:10:51,645 we estimated down to 14 trillion as of the summer of last year. 179 00:10:52,225 --> 00:10:55,485 So really all the growth came from the investments. 180 00:10:56,265 --> 00:10:58,645 And that's true across the board, 181 00:10:59,105 --> 00:11:03,405 but particularly in the stock market and that's owning stock directly. 182 00:11:03,585 --> 00:11:06,045 And again, when you think about who owns stock, 183 00:11:06,395 --> 00:11:11,365 even though it's been democratized really across different households in 184 00:11:11,366 --> 00:11:14,125 the US where everyone has more stock ownership, 185 00:11:14,465 --> 00:11:18,845 we still see the majority of stock ownership at those higher levels of wealth. 186 00:11:19,606 --> 00:11:24,485 It's also true through ETFs and mutual funds too. So in my portfolio, 187 00:11:24,625 --> 00:11:28,925 if I'm mainly investing in stocks, I'm gonna experience some of that growth, 188 00:11:29,265 --> 00:11:33,925 but it's maybe gonna be a little bit diluted if instead if I was just directly 189 00:11:33,955 --> 00:11:36,405 investing in stocks. Also, 190 00:11:36,645 --> 00:11:39,445 interesting that in the last several years we've seen bonds come back as well. 191 00:11:40,335 --> 00:11:44,565 Bonds have increased in value and they've contributed probably about probably 192 00:11:44,566 --> 00:11:45,345 about a third of, 193 00:11:45,345 --> 00:11:49,845 of what we've seen in the growth outside of that majority of the stock market. 194 00:11:50,465 --> 00:11:55,085 So it's definitely been investments, but not only stocks, mainly stocks, 195 00:11:55,086 --> 00:11:58,245 but we did also see those bond levels increase as well. 196 00:11:59,205 --> 00:12:04,085 Ian, we, we spoke about how this growth in wealth has certainly not 197 00:12:04,315 --> 00:12:06,125 been even, you know, 198 00:12:06,126 --> 00:12:09,565 distributed evenly across all populations. 199 00:12:10,625 --> 00:12:14,605 How have you seen this impact across, say, different age tiers, you know, 200 00:12:14,885 --> 00:12:19,045 retirees versus Gen Zs and, and, and younger consumers? Has, 201 00:12:19,355 --> 00:12:21,245 have there been any developing, you know, 202 00:12:21,246 --> 00:12:23,525 trends that are noticeable within those demographics? 203 00:12:24,606 --> 00:12:25,525 Definitely, definitely. 204 00:12:25,725 --> 00:12:29,925 And you could probably imagine that folks who are maybe more advanced in age 205 00:12:29,926 --> 00:12:33,645 have had the time to build up in wealth, and that's always been the case, 206 00:12:33,705 --> 00:12:38,285 but it's even more so the case now. Not only the, the most recent 10, 207 00:12:38,286 --> 00:12:39,119 15 years, 208 00:12:39,345 --> 00:12:44,005 really the last 2030 years consumers who were able to invest in the stock 209 00:12:44,006 --> 00:12:45,245 market, even at different levels, 210 00:12:45,554 --> 00:12:50,445 were able to really derive up their overall wealth and move into those 211 00:12:50,725 --> 00:12:52,485 affluent segments that we talked about earlier. 212 00:12:53,625 --> 00:12:55,525 We have a segment we call the retirees. 213 00:12:55,625 --> 00:12:58,285 You could probably guess they're at least 65 years old. 214 00:12:59,325 --> 00:13:01,405 Why they comprise about a third of the us, 215 00:13:01,406 --> 00:13:06,045 34% of households they own or command 44% of all the assets. 216 00:13:06,625 --> 00:13:11,125 So they are an incredibly important segment for financial services marketers to 217 00:13:11,126 --> 00:13:13,525 capture not only today, 218 00:13:14,025 --> 00:13:18,205 but one of the biggest questions in financial services is this impending 219 00:13:18,605 --> 00:13:23,285 transfer of wealth that's over the horizon. When the retirees move on, 220 00:13:23,515 --> 00:13:26,565 they're gonna leave their wealth to their families. 221 00:13:26,566 --> 00:13:29,165 They're gonna leave it at different inheritance options. 222 00:13:29,785 --> 00:13:32,605 So financial services marketers are then trying to look at, well, 223 00:13:32,615 --> 00:13:36,684 who's gonna maybe move into wealth who aren't in wealth today? 224 00:13:37,365 --> 00:13:42,285 And we see a lot of the Gen X families spread across those wealth segments I 225 00:13:42,286 --> 00:13:46,605 talked about, but they're in that age span that in the not too distant future, 226 00:13:46,705 --> 00:13:50,804 and then also maybe in a little bit longer they're gonna inherit their wealth. 227 00:13:51,425 --> 00:13:54,485 So they might not have the largest amount of wealth today, 228 00:13:54,615 --> 00:13:59,005 about 27% of assets, but once they inherit wealth, 229 00:13:59,035 --> 00:14:03,165 they're gonna really move to the forefront of being the wealthiest segment. 230 00:14:04,105 --> 00:14:06,325 You also mentioned the Gen Z segment. 231 00:14:06,835 --> 00:14:10,005 They really haven't had enough time to develop their wealth. 232 00:14:10,825 --> 00:14:14,765 The investing they can do hasn't been benefited by compounding 233 00:14:15,495 --> 00:14:20,045 which is one of the most powerful laws, right? There are some households though, 234 00:14:20,046 --> 00:14:22,965 that have been able to communicate that wealth. It's a very small number. 235 00:14:23,055 --> 00:14:27,685 There are less than 400,000 households that are in the Gen Z segment 236 00:14:27,995 --> 00:14:32,045 that have at least a million dollars. So they're very hard to find. 237 00:14:32,225 --> 00:14:35,005 If you can find them, they're fantastic customers, right? 238 00:14:35,006 --> 00:14:39,845 Because the overall opportunity to have a customer lifetime value that's 239 00:14:39,965 --> 00:14:44,885 high is incredible with that household. 'cause You'll have them for 40, 50, 240 00:14:44,885 --> 00:14:46,165 60 years. Right. 241 00:14:46,535 --> 00:14:50,565 Right. It's interesting noticing, again, 242 00:14:50,625 --> 00:14:54,205 the similarities between what we're seeing within wealth trends and what we've 243 00:14:54,206 --> 00:14:57,685 also been seeing within, within credit trends and how 244 00:14:59,195 --> 00:15:03,765 just the factor of age, you know, is, is such a, a, a noticeable trait, 245 00:15:03,945 --> 00:15:07,485 you know, when, when sort of predicting how different, you know, 246 00:15:07,515 --> 00:15:09,485 populations or households might 247 00:15:11,095 --> 00:15:14,685 might have benefited or not benefited over the last few years 248 00:15:16,455 --> 00:15:21,245 using those, those age demographics as, 249 00:15:21,265 --> 00:15:24,045 as an example within the credit trends, you know, field for example, 250 00:15:24,695 --> 00:15:26,005 we've seen how 251 00:15:28,135 --> 00:15:33,075 within s the same income tiers as well as 252 00:15:33,095 --> 00:15:34,435 the same risk tiers, 253 00:15:36,245 --> 00:15:41,185 age is such a huge distinction between how well different populations, 254 00:15:41,186 --> 00:15:45,305 different households and consumers have weathered the financial storms over the 255 00:15:45,306 --> 00:15:49,865 last few years. Because of what you mentioned earlier. You know, the, 256 00:15:49,866 --> 00:15:54,545 the younger generations simply haven't had the time to build up those assets to 257 00:15:54,605 --> 00:15:58,185 let you know investments compound over time and, and, 258 00:15:58,605 --> 00:16:02,865 and have a financial rock to fall back on when, 259 00:16:03,055 --> 00:16:04,745 when times get tough. 260 00:16:06,205 --> 00:16:10,665 So it's been been interesting to see that within those 261 00:16:11,095 --> 00:16:14,465 same tiers everything else being, being similar, 262 00:16:15,335 --> 00:16:16,265 just knowing that, 263 00:16:16,415 --> 00:16:20,305 that someone hasn't had as much time within their financial lives to build up 264 00:16:20,306 --> 00:16:23,825 those assets can be a, a predictor. So like you say, 265 00:16:24,365 --> 00:16:28,305 if you can find those, hang onto 'em. Yeah. Grab 'em and, and, 266 00:16:28,405 --> 00:16:29,238 and hold on. 267 00:16:29,655 --> 00:16:31,345 Yeah. Give them your promotional rates, 268 00:16:31,415 --> 00:16:33,585 give them your top tier customer service, 269 00:16:33,855 --> 00:16:36,865 make sure their needs are met and anticipate their needs as well. 270 00:16:37,585 --> 00:16:41,385 Absolutely. Now, how, how about you know, age is certainly an interesting one. 271 00:16:41,386 --> 00:16:43,665 How about geography? Anything that's, 272 00:16:43,666 --> 00:16:48,385 that we see on a geographic basis on a state level or, or, you know, 273 00:16:48,386 --> 00:16:52,145 a broader territory level that's that you, you can pull out? 274 00:16:52,825 --> 00:16:56,145 Yeah, definitely. If, if you do talk to financial service marketers and you say, 275 00:16:56,225 --> 00:16:57,058 well, what are your biggest markets? 276 00:16:57,785 --> 00:17:02,745 Everyone's probably gonna say the big five states California, Florida, Illinois, 277 00:17:02,885 --> 00:17:06,825 New York, and Texas. And those are still the biggest markets overall. 278 00:17:07,045 --> 00:17:09,025 If you're introducing branches somewhere, 279 00:17:09,165 --> 00:17:12,825 or if you're doing some new advertising for market acquisitions, 280 00:17:12,915 --> 00:17:16,785 those are still gonna be your largest markets. But if you're looking for, well, 281 00:17:17,025 --> 00:17:21,545 where are concentrations maybe of the most affluent households or, 282 00:17:22,145 --> 00:17:24,185 or households where the median assets is higher? 283 00:17:24,734 --> 00:17:29,625 It's interesting that New England starts to actually appear more often than not. 284 00:17:30,525 --> 00:17:31,945 We find that Connecticut, 285 00:17:31,946 --> 00:17:36,744 Massachusetts New Hampshire and then New Jersey and New Jersey would include 286 00:17:38,075 --> 00:17:41,905 we're seeing from some wealth going out of New York into the suburbs of New 287 00:17:41,905 --> 00:17:45,545 Jersey. And then Hawaii have the, the highest assets. 288 00:17:45,685 --> 00:17:49,725 So each one of those states on their own might not be the biggest market in 289 00:17:49,726 --> 00:17:52,045 terms of volume of the number of households, 290 00:17:52,345 --> 00:17:56,045 but if you're looking to increase your average account balances, 291 00:17:56,335 --> 00:18:00,445 those are some areas you definitely wanna make sure that you have a presence in. 292 00:18:01,244 --> 00:18:03,685 Right. And then if you wanna take it down to another level, 293 00:18:03,744 --> 00:18:06,645 say let's look at some cities and as I mentioned earlier, 294 00:18:06,734 --> 00:18:09,045 we'll look at cities from the census definition. 295 00:18:09,665 --> 00:18:13,565 So what's known as the core based statistical area or CBSA 296 00:18:14,775 --> 00:18:17,325 where you're seeing the largest affluent growth is New York, 297 00:18:17,595 --> 00:18:20,885 Chicago la and then also Dallas. 298 00:18:21,686 --> 00:18:23,405 We do have then maybe about four cities. 299 00:18:23,406 --> 00:18:26,325 There are about the same beyond that in terms of growth, 300 00:18:26,825 --> 00:18:30,925 but growth is happening. And it might be in some areas that you suspect, 301 00:18:30,945 --> 00:18:34,605 you hear taxes getting bigger. You hear that, you know, 302 00:18:34,606 --> 00:18:38,285 the New York suburbs is where maybe some of that Manhattan money is going to. 303 00:18:39,425 --> 00:18:43,244 But I was interested to see that LA is still in that list when at least 304 00:18:43,395 --> 00:18:47,285 anecdotally people say wealth is fleeing from California. Right? 305 00:18:47,605 --> 00:18:52,405 You're not necessarily seeing that the case in at a level that would make 306 00:18:52,525 --> 00:18:55,725 a dent in California being an attractive market. 307 00:18:55,955 --> 00:19:00,685 It's just so large that it still makes sense for any financial services marketer 308 00:19:00,686 --> 00:19:03,805 to try to target consumers in that state. 309 00:19:04,805 --> 00:19:08,845 Interesting. Okay. So, so then let me put you on the spot then. You know, ah, 310 00:19:08,945 --> 00:19:11,525 if we are going to then go ahead and say, all right, 311 00:19:11,825 --> 00:19:16,565 we want to target Los Angeles, we want to target, you know, the young affluent, 312 00:19:16,566 --> 00:19:19,765 we want to, you know, we want to target something, 313 00:19:20,865 --> 00:19:23,085 how does one go about doing that? 314 00:19:23,135 --> 00:19:27,005 Where should marketers be focusing their efforts on capturing, you know, 315 00:19:27,285 --> 00:19:30,405 whatever targets, you know, make sense for them to, to define? 316 00:19:31,165 --> 00:19:35,885 Hmm, great question. I like to look at it from a three-step process. First, 317 00:19:35,915 --> 00:19:39,725 what is the geographic market that presents me with the most opportunity? 318 00:19:40,365 --> 00:19:43,125 And this would be true if I have brick and mortar locations, 319 00:19:43,385 --> 00:19:44,845 or even if I'm a digital bank, 320 00:19:44,846 --> 00:19:49,685 because I'm still gonna wanna inform my advertising with a different designated 321 00:19:49,725 --> 00:19:54,605 marketed area or DMA that I wanna focus that marketing on as well 322 00:19:54,606 --> 00:19:59,525 as my digital and online advertising to see which zip codes 323 00:20:00,065 --> 00:20:03,005 I'm looking for when I wanna bid on an ad. 324 00:20:03,305 --> 00:20:06,565 So I would start with that looking geographically where I want to focus. 325 00:20:07,105 --> 00:20:10,405 And as I mentioned, California's a great state still to focus on. 326 00:20:11,065 --> 00:20:14,565 And then further, if I wanna look at a metropolitan area, as I said, 327 00:20:14,744 --> 00:20:19,045 Los Angeles is a great area. San Francisco still has significant wealth, 328 00:20:19,425 --> 00:20:22,125 and if you include down in the Silicon Valley area, 329 00:20:22,126 --> 00:20:23,965 you've got great opportunity there. 330 00:20:24,585 --> 00:20:28,125 But then what I would wanna do is understand which households in those 331 00:20:28,484 --> 00:20:32,365 geographies are really the drivers that are pushing those numbers up and making 332 00:20:32,366 --> 00:20:35,805 it a attractive market that I wanna make sure that I can win. 333 00:20:36,545 --> 00:20:41,045 And that's where we can help understand what is a total a household's total 334 00:20:41,046 --> 00:20:41,879 wealth, 335 00:20:41,905 --> 00:20:45,484 and also what their deposits versus their investment breakdown looks like. 336 00:20:46,105 --> 00:20:50,125 So you can understand if this is a household that if I've got a high yield 337 00:20:50,126 --> 00:20:54,045 savings account or a CD that I wanna offer promotional rate on, 338 00:20:54,475 --> 00:20:57,205 they can not only open an account, not only fund it, 339 00:20:57,225 --> 00:20:59,525 but they can fund it with a significant amount of money. 340 00:21:00,025 --> 00:21:03,125 So I get a return on my advertising right away. 341 00:21:03,905 --> 00:21:05,685 And then the third step though, would, would, 342 00:21:05,686 --> 00:21:09,365 would be to understand what sort of messages are going to resonate with these 343 00:21:09,366 --> 00:21:13,405 households. And that's where tried and true segmentation can help, 344 00:21:14,165 --> 00:21:16,885 or what I talked about before might be a little bit more of the quantitative, 345 00:21:16,984 --> 00:21:20,765 the hard numbers of where is the opportunity Segmentation helps with the 346 00:21:20,766 --> 00:21:22,205 qualitative. Okay, 347 00:21:22,206 --> 00:21:26,845 once I know I wanna advertise to these people what's the sort of 348 00:21:26,875 --> 00:21:30,565 messaging that I should focus on? What should resonate with them? 349 00:21:30,855 --> 00:21:32,765 Maybe where are they in their life stage? 350 00:21:32,785 --> 00:21:36,645 So maybe their needs are gonna be different in this part of Los Angeles versus 351 00:21:36,646 --> 00:21:40,685 another part of Los Angeles. You put those three steps together and you, 352 00:21:41,205 --> 00:21:44,165 you pretty much have the best way that you can attack any market. 353 00:21:45,325 --> 00:21:50,244 Interesting. So you're not just getting to the identification, the, the what, 354 00:21:50,965 --> 00:21:55,125 you know. Yeah. But then drilling down very importantly into the how, like, 355 00:21:55,275 --> 00:21:59,285 okay, everyone's gonna be trying to, to hit these populations. 356 00:22:00,025 --> 00:22:01,605 How do I distinguish myself? 357 00:22:01,744 --> 00:22:05,285 How do I tailor my message to what they are most receptive to? 358 00:22:05,915 --> 00:22:07,085 Correct, correct. And, 359 00:22:07,105 --> 00:22:10,965 and even sometimes I don't need to know that it's the O'Neill household that I 360 00:22:10,966 --> 00:22:13,885 want to target. I just know that there are households in the, 361 00:22:13,895 --> 00:22:17,165 where the O'Neill household resides that I want to target. 362 00:22:17,744 --> 00:22:22,645 So there's a big sort of back and forth and understanding someone's identity 363 00:22:22,705 --> 00:22:26,445 and resolving a message to someone's actual identity, which is fantastic, 364 00:22:26,625 --> 00:22:29,045 but it shouldn't hinder any of your efforts. 365 00:22:29,515 --> 00:22:33,484 Awesome. This has been very interesting, 366 00:22:33,545 --> 00:22:34,925 and I appreciate your time. 367 00:22:35,105 --> 00:22:40,045 Before I wrap up here I do want to sort of do the, 368 00:22:40,145 --> 00:22:44,765 do the proverbial 30,000 foot question, open it up and say, 369 00:22:45,865 --> 00:22:49,365 as you look out, you know, we're, we're halfway through 20, 25. Now, 370 00:22:49,945 --> 00:22:52,685 as you look out, you know, for the rest of the year, and, 371 00:22:52,686 --> 00:22:55,685 and I'll even let you go into 2026 if you desire, 372 00:22:56,555 --> 00:23:00,565 what do you see in store? You know, are are we gonna see continued growth? 373 00:23:00,785 --> 00:23:01,545 Are we, 374 00:23:01,545 --> 00:23:05,965 are we expecting what we've been seeing over the last few years to, 375 00:23:06,025 --> 00:23:07,365 to continue? What do you think? 376 00:23:08,244 --> 00:23:13,165 I think so with some caveats with the new administration and that 377 00:23:13,166 --> 00:23:14,244 are willing to take, 378 00:23:14,885 --> 00:23:19,725 I guess you could say more bold or more significant efforts it's difficult 379 00:23:19,726 --> 00:23:24,484 to maybe chart or plot a progress that's gonna be an even line. 380 00:23:25,125 --> 00:23:29,845 We might see more dips in valleys and mountains occurring on the deposit 381 00:23:30,035 --> 00:23:32,965 side. So if you're in banking or your credit union, 382 00:23:33,525 --> 00:23:37,405 I think we're gonna see deposits stay somewhat flat, unfortunately, 383 00:23:38,065 --> 00:23:40,445 and we're still gonna have that hunt for deposits, 384 00:23:40,446 --> 00:23:45,359 which everyone has been trying to attract more deposits over the last three 385 00:23:45,360 --> 00:23:48,605 years. There is some fatigue that's set in. Fortunately, 386 00:23:48,725 --> 00:23:53,005 I think that's gonna continue for the next year or so where you're gonna have to 387 00:23:53,006 --> 00:23:57,445 offer some very attractive rates for people to decide to change their existing 388 00:23:57,446 --> 00:24:01,765 relationships and bring more deposits over. On the investment side, though, 389 00:24:01,766 --> 00:24:04,125 that has been the engine, right? The stock market, 390 00:24:04,744 --> 00:24:08,325 we did have a dip in the stock market earlier this year, 391 00:24:08,345 --> 00:24:10,525 but it's come back and we're up year to date. 392 00:24:11,065 --> 00:24:15,885 And if this sort of progress and expectation occurs and continues to occur, 393 00:24:16,325 --> 00:24:20,165 I think we'll still see growth. Maybe not at the same level that we had before, 394 00:24:20,825 --> 00:24:23,445 but we'll still see growth in the future. However, 395 00:24:23,965 --> 00:24:28,005 all bets are off if there are significant policy changes by the existing 396 00:24:28,006 --> 00:24:28,965 administration. Right. 397 00:24:29,195 --> 00:24:32,325 Yeah, I'll be interested to see, I think not just myself, 398 00:24:32,725 --> 00:24:35,925 everyone is going to be interested to see that as well as, right, 399 00:24:35,984 --> 00:24:40,285 not just the answer to will there be more growth, but where, you know, yeah. 400 00:24:40,425 --> 00:24:44,885 Are we going to see a continued spread of the, of the k, 401 00:24:45,365 --> 00:24:49,805 you know, gap or, you know, will things be a little bit more evenly distributed? 402 00:24:50,845 --> 00:24:54,165 Ian, as always, it's a pleasure talking with you and, and, 403 00:24:54,225 --> 00:24:55,605 and having you share your insights. 404 00:24:56,425 --> 00:25:00,205 If our listeners would like to reach out to you, how can they find you, Ian? 405 00:25:00,925 --> 00:25:03,695 Yeah, so best way to reach out to me is through email. 406 00:25:04,755 --> 00:25:09,055 My email address is ian dot wright IAN dot 407 00:25:11,175 --> 00:25:14,175 W-R-I-G-H t@equifax.com. And I'd love to hear from folks. 408 00:25:14,765 --> 00:25:17,935 Awesome. Thank you again, Ian. And to our listeners, 409 00:25:18,055 --> 00:25:21,175 I hope you enjoyed today's topic. If you have any questions, 410 00:25:21,234 --> 00:25:22,695 you can certainly reach out to us, 411 00:25:22,785 --> 00:25:27,734 especially if you have ideas for a future podcast. Reach out to us at Risk 412 00:25:30,095 --> 00:25:32,055 advisors@equifax.com. We look forward to hearing from you. Thank you.