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Business news Website Portfolio.com revealed results of a sentiment, investing and brand-preference study of small to medium-sized business owners in the U.S., conducted by American City Business Journals. The findings reveal shifting investment trends among the one-third of these business owners who rank among the “mass affluent.” The study probed attitudes and investment strategies, and revealed clear brand preferences within the banking and financial services sectors.
The study found some 1.17 million high-value SMB owners with average investment portfolios of $518,000 representing some 33 percent of the SMB market. The study also found that affluent business owners are predominantly men, earn more than $228,000 per year, are well-educated and live overwhelmingly in urban and suburban counties. They run what the study categorized as successful ($6 million to $11 million in annual revenues) and well-established (28-31 years) businesses.
“Business optimism has rebounded in the group compared to the all-time lows we saw in 2009, though perceptions of banks are lagging that of other financial-services companies,” said Godfrey Phillips, vice president for research at ACBJ. “Today, SMB owners represent a robust, $605 billion opportunity to the financial services industry, with those having a portfolio of more than $250,000 planning to invest more than $60,000 this year.”
According to the study, the top 10 most trusted financial services brands now are TDAmeritrade, The Vanguard Group, ETrade, Charles Schwab, NASDAQ, Fidelity, Principle Financial Group, Morgan Stanley Smith Barney, Morgan Stanley and Raymond James. Meanwhile, the top 10 bank brands for the group comprise: US Bank, BB&T, Wells Fargo, HSBC, Chase, Key Bank, SunTrust, Capital One, Northern Trust and Royal Bank of Canada (RBC).
The biggest gainers in the rankings compared to 2009 results were TDAmeritrade (up 67 points from last year’s ranking), U.S. Bank (up 46 points), and Morgan Stanley Smith Barney (up 45 points). Also showing sizeable gains were Principal Financial Group, Key Bank, ETrade, and Morgan Stanley. The annual study was conducted with 1,762 business owners, CEOs and presidents of companies with more than one employee. The study also included additional interviews or augments specifically with companies that have 1-4 employees, 100-499 employees and more than 500 employees.
“This group is showing a clear return to trusted brands, with more than 77 percent saying they look to buy from well-known brands in down times,” said Phillips. “Overall, the strongest financial services brands in 2010 were TDAmeritrade, the Vanguard Group, E*Trade and Charles Schwab. Fewer are sourcing their financial advice from traditional full-service brokerage companies. And they’re showing a definite return toward real estate, retirement IRAs and annuities.”