President's Blog - So, Where Are You From?


There is a homogenous nature to life in America these days. Every community has at least one McDonald’s and maybe more than one Starbucks. Area codes in phone numbers have lost their geographical significance. When a trend strikes, it strikes in every corner of the country.

But the United States is vast. It’s 3.8 million square miles of land mass. It is host to a wide range of land formations like mountains and valleys. It has forests and deserts. It has thousands of lakes. It has humid areas and arid areas. While there are 12,383 miles of coastline, there is a huge difference between the New England Coast, the Gulf Coast and the Pacific Coast.        

Just as there are geographical differences between many areas of the United States, there are differences in the people who were raised in those different geographical areas. There are different speech patterns, there is a difference in priorities, there is a difference in how citizens react to one another.

And there are differences in the way people handle their investments and their finances based on where they were raised and where they currently live.

Financial providers who service the entire nation may try to approach all investors with identical marketing offerings. But financial providers who have regional branches must know that what works to elicit a response from someone in Boston is not going to work as well with someone in Baton Rouge.

The differences between investors based on their geographical location is the basis for Spectrem’s new study titled Regional Influences on Investor Decisions. Segmenting an entire year’s worth of research on investors nationwide determined that there are sizable differences between investors based on where they live.

Like with all research, Regional Influences on Investor Decisions does provide generalized results. But the individual reports created on five regions of the United States – the Northeast, Midwest, South, Mountain West and Pacific Coast – determined that investors lean one way or another in their approach to investing and their attitudes towards advisors based on where they live.

The individual regional reports tell the story. The Mountain West report, for example, tells us that investors from Texas to Montana are more likely to be involved in the day—to-day management of their investments. Investors from the South are more optimistic about the performance of their investments, investors from the Northeast are more likely to have trust in their financial advisor. Investors from the Pacific Coast, meanwhile, are less likely to have a financial advisor and less likely to follow that advisor’s advice.

And investors from the Midwest are more likely to have made their own wealth rather than inherit it.

Advisors and providers can benefit from a full understanding of how regional influences impact investing and advisor relationships. A nationwide overview of investors may be helpful when determining a marketing campaign that will run through all 50 states, but advisors with boots on the ground will tell you approaching an investor in Los Angeles is much different than approaching one in Chicago. And advisors and providers who work specifically in flyover areas like the Great Plains of the Midwest or the elevated and less populated areas of Montana, Wyoming and Idaho know that what sells in Hartford may not appeal in Helena.

Regional differences are just one way investors differ, and that is why research is done based on age, wealth, gender and occupational differences. No two investors are identical, but investors in a certain segment are more likely to be similar.

As long as financial advisory services maintain some level of human interaction, investor segmentation is an area advisors and providers should consider. And when a firm has regional branches or a regional approach to providing services, understanding the push and pull of investors from a certain region matters.



©2019 Spectrem Group