Hamilton: Customer Analysis and Environment Scanning

Hamilton is a city in the province of Ontario that has experimented an increasing amount of growth and stability in the past 10 years. This is one of the reasons why we have decided to expand our operations to this city since we see a good opportunity to take advantage of the economic environment. Our company consists of providing financial services to individuals who have no knowledge as to how to structure a budget to meet any type of particular financial goals they have. Financial planning is becoming a critical component especially for the baby boomers segment of the population. There is a positive outlook in the financial planning services industry, since various segments of the populations are becoming more aware of the importance of having a financial plan and this trend is expected to increase in the year of 2019.

Before expanding our operations to the city of Hamilton, we have to determine to what specific segment of the population are we providing financial planning services. In order to come up with the specific market segment that we plan to address our services, there has to be opportunities that we could exploit in within specific segments of the population. In the year of 2001, the population segment that composed the highest number of individuals living in Hamilton were the categories that ranged between 35-39 and 40-44.

However, in the last census (year 2016), those cluster groups shifted to the age categories of 50-54 and 55-59. This indicate to us that the majority of those segments of the population during the 2001 census, remained in the city of Hamilton and plan to retire there. The cluster group within the age bands of 50-59 composed approximately 7.4% of the entire population of Hamilton. This segment of the population is expected to have high amounts of funds in savings since they are expected to be in the retirement phase in approximately 5-10 years.

Segmentation by Culture

Now that we have our age group, we have to determine if we are addressing our services by cultural background. Based on the last census done in the year of 2016, Canadians comprise approximately 75% of the population in the city of Hamilton. This indicates to us, that the major source of opportunity is found within the segment of the population whose country of birth is Canada.

According to Sara Mayo, a social planner with Hamilton’s Social Planning and Research Council, “Hamilton has not been a strong attractor to immigrants, in fact most immigrants are deciding to move to the West Coast and even Manitoba has seen a greater increase of growth compared to the province of Ontario”. Based on this analysis, we have decided to stay with the Canadian segment group within the ages of 50-59 in the last stages of the pre-retirement phase.

Environment Scanning

In the economic environment within the city of Hamilton there has been an outstanding performance when it comes to household income. The percent of the population that earns an income greater than $60,000 has increased by approximately 140%. We believe that one of the driving factors that has caused this increase is that most of the segment of the population ranging currently in the 50-59 age category decided to stay in the city of Hamilton which has caused an increased in both savings and investments creating an outstanding increase in the level of income.

The segment of the population that earns $60,000 and over comprises approximately 23% of the population. Nevertheless, this does not mean that other segments of the populations are not earning $60,000 or more but we believe that the permanence of those citizens in the city of Hamilton contributed to this positive effect in Hamilton’s economy. Moreover, an expected increase in interest rates makes the housing market in the city of Hamilton to be until a certain extent more vulnerable. Although, this could be beneficial for our organization in the nearby future due to lower rent costs, it creates uncertainty to potential clients that have their funds invested into property.

Furthermore, the rise of technology will become more and more relevant as those technologies are integrated with the financial planning process to meet the customer’s needs.

Technology will allow clients to see constant changes in their financial plan without the need to be physical present with their financial planner. Understanding this trend is essential for our organization to adapt for the new technological changes that will be present in the market and to avoid the demise of our organization.

Compared to the year of 1965, there has been a significant increase in the life expectancy rate within the population of Hamilton. This is one of the reasons why there is an increasing demand for financial planners in the city. Individuals are looking for ways to allocate their funds throughout retirement without misusing those funds. Since the life expectancy has increased compared to other years, people know that it is critical to have a well-established financial plan.

The probability that men and women live to the age of 70s lies within the 90% life expectancy rate. The life expectancy rate for men and women to live until the age of 80 has increased by 51% while for women it increased by 14%. Lastly, the life expectancy rate to live until the age of 90 has increased for men by 120% while for women it has increased by 36%. All these figures show that there is a possible concern as to how will the new retirees will expect to live within their means during the phase of retirement and that this will be one of the topics were potential clients will have the most concern.

Competitive Analysis

Now when it comes to competition there are several institutions that are well established in Hamilton. Edward Jones has two financial advisors in the city of Hamilton and both of them are located separated from the other financial advisors. We are aiming to implement a similar strategy but this plan exclusively depends on the segment of the population we are addressing our services. Edward Jones is the organization that has the biggest presence in the city of Hamilton. One of its main representatives is Steve Gregory who is located in 231 Locke Street South Unit 1, Hamilton, ON L8P 4B8. The services that Edward Jones focuses on include Estate and Legacy Strategies, Retirement Income Strategies, Business Owner Considerations, Retirement Savings Strategies, Wealth Protection Strategies, Wealth Protection Strategies and Education Savings Strategies.

Our second biggest competitor is Oak wealth management primarily because of their vicinity to our proposed business location and the because of the services they provide. Even though it’s a small company with 8 – 10 employees, it has been in business for 10 years now. The various advisors are well qualified, have decades of experience under their belt and each team member have a diverse skill set, all the qualities that we aim to integrate in our team as well. They also provide similar services like retirement planning, investment consultation and charitable giving. What would give us an edge is the level of service, growth and return on investments that our clients would receive and since Hamilton is a closed knit community, we believe that customers word of mouth would be one of our best tools for advertisement.

TD Bank is our third competitor with two of its Financial Planners located close to the area where we plan on establishing our office. Both the financial planners come with extensive knowledge and experience within the industry and offer a variety of services too. Their services include, but are not limited to, Estate Planning, Retirement Planning and Tax Management. Being a part of TD, they have a strong customer base and can use that to their advantage. However, because our target market falls in the age category of 50-59 years, we will be able to provide a high level of expertise as we will be more focused on the needs and financial goals of those clients.

As previously discussed, the segment of the population we are focusing our efforts will be the Canadian cluster group that is about to approach the retirement phase. Now based on this information we have decided to put our offices close to the King’s Forest Golf Course. What is the reasoning behind this decision? We expect those individuals who are approaching the retirement phase to be more involved in sport of golf. Since this segment of the population has enough savings and are most likely to have a higher income than 10 years ago, it is most likely that these individuals are able to afford to play golf.

The location of the King’s Forest Golf Course is at a reasonable distance from most financial planning advisors which makes it suitable for us to open an office close to the golf course but at the same time located in a commercial area. We found that Kentley is the closest commercial area and it is just over 12 minutes by car from the golf course. There is a shopping mall called Eastgate Square in that commercial zone. Additionally, we are planning to make a large advertising campaign in this area which will allow us to build a market presence since we are new participants in the market.