The Mass Affluent Segment: Client-centric and Competitive

Branch advice was client-centric well before client-centric design was en vogue.

Two decades ago, the birth of the deposit-taker branch advice channel heralded the inception of a new approach to designing wealth distribution networks. From the “serve-all-ye-who-come” of a traditional bank branch, where generalist staff assisted all types of clients with a broad menu of products and services, the new conduit opted for a curated shelf aimed at a discrete client segment defined by its investable wealth, and serviced by a specialist sales force.

By maintaining a clear focus on a specific client segment by design, the branch advice channel—the targeted mass affluent programs of the Big Six banks and other deposit-takers—ushered the era of client-centric approach to wealth delivery architecture. Over time, the investable wealth boundaries of the mass affluent segment pursued by branch advice have expanded, but the channel’s clear-cut segment focus has remained unaffected and has served as the guiding principle for the construction of its product and services shelf. Until that point, only the private investment counsellor (PIC) channel with its high net worth (HNW) focus had pursued this single segment concept, although not even PIC could match the branch advice’s ambition of becoming a one-stop-shop for all (or the majority of) financial needs of a wealth segment.


Client-centric but business-driven

To be sure, the drivers underpinning this shift to a client-centric branch delivery design went far beyond a philosophical commitment to the client-centric concept. Rather, it reflected a slew of emerging business imperatives, including the banks’ need to “grow” their distribution touchpoints with—and retain the walletshare of—their baby-boomer customers, whose priorities shifted from credit-taking to wealth-building in the 1990s. This change in demand prompted banks to recognize the importance of wealth management and precipitated the dramatic change in the focus of deposit-taker branch networks.

The rest is history. Two decades into the experiment, the banks’ determined focus has born fruit. Major deposit-takers have gone from have-nots to haves in the wealth management business at large and are the current leaders in the provision of wealth management and investment services to the mass affluent segment. Auxiliary benefits include the significant expansion and the rise to prominence of their mutual fund/asset management businesses.

Back to today

In the spirit of raising the overall understanding of mass affluent strategies we have created the Mass Affluent Report. This study reflects on the existing delivery channels with significant presence in the Canadian mass affluent household segment. This report—the compendium of our and the industry’s best thinking on the topic of how to structure a successful mass affluent offer—examines the path to the current positioning of the various wealth management competitors servicing the mass affluent household segment. The chief purpose is to identify the key success factors in servicing and growing business with this segment, as well as contemplate how future models might have to evolve to deliver on the forthcoming imperative of delightful and frictionless client experience.

As is our tradition, subscription to this research includes a detailed research briefing in which we hope to further unlock the power of this research to its various users.