Post-COVID Wealth Trends: Why the Middle is Shrinking and What It Means for Financial Marketers

Highlights: 

• The U.S. economy shows significant wealth growth, but it's uneven, leading to a "barbell effect" where the middle class shrinks while affluent and mass market segments grow differently.

• Age plays a crucial role in wealth distribution, with retirees holding a large share of assets and Gen X positioned for future wealth transfer, offering strategic opportunities for financial marketers.

• Investment growth is outpacing deposit growth, necessitating that financial institutions and marketers adopt data-driven, segmented strategies focusing on geography, asset mix, and tailored messaging to engage target audiences effectively.

The post-COVID economy has been a story of both remarkable growth and unsettling imbalance. In the July 31 episode of the Market Pulse Podcast, I sat down with Ian Wright, Chief Strategy Officer for the IXI Network, a proprietary network measuring over $30 trillion in U.S. consumer assets, to examine how wealth in the U.S. has shifted since the pandemic—and what those shifts mean for financial institutions and marketers. Using exclusive data from IXI, Ian revealed insights that were as striking as they were instructive.

The Big Picture: $66 Trillion in Wealth… But Not for Everyone

At first glance, the data paints an optimistic picture: total household assets in the U.S. have grown to $66 trillion, up $6 trillion in just the last five years. Most of that growth came from investments, particularly in the stock market.

But dig a little deeper, and the story becomes more nuanced. While overall wealth rose, the median household’s wealth declined. Investments fell by 12% for the median consumer, and deposits remained flat. It’s a clear sign that this growth hasn’t been evenly distributed.

This divergence is captured in what we’ve long referred to as the K-shaped recovery: one part of the population is thriving, while the other is falling behind.

The Shrinking Middle and the Rise of the “Barbell Effect”

IXI’s segmentation of households tells a powerful story:

• Mass Market Households (about 75 million households, with under $100K): Up 7% in household count, but only 1% in assets.

• Mass Affluent Households (about 44 million households, with $100K–$1M in assets): Down 4% in both household count and total assets.

• Affluent Households (over $1M): Up 17% in assets, despite representing just 14 million households.

This “barbell effect”—where we see growth at both ends of the wealth spectrum and contraction in the middle—is reshaping the consumer landscape. For financial institutions, it means the mass affluent segment is no longer the stable growth engine it once was.

Age is More Than Just a Number

Age plays a critical role in how households are weathering economic shifts. Retirees (65+) now control 44% of all consumer assets despite making up just 34% of households. They’ve had time to benefit from decades of market growth and compounding returns.

In contrast, younger generations—particularly Gen Z and Millennials—have not had the same opportunity to build wealth, and in many cases, lack the financial cushion needed to withstand market volatility or rising inflation.

There is a silver lining for marketers: Gen X households, while currently in the middle of the wealth curve, are positioned to inherit a significant portion of retiree wealth over the coming decades. Planning for this future transfer of wealth is a smart strategic move for financial marketers.

Deposits are Flat, But Investments Are Surging

Another revealing trend is where growth is actually occurring. While deposits have remained flat—or even declined slightly—investments have driven nearly all the recent growth in household assets. This includes stocks, mutual funds, ETFs, and even bonds, which have seen renewed interest in recent years.

This shift has implications for banks and credit unions still focused on deposit growth. With competition for deposits increasing and rates plateauing, institutions will need to offer more than just attractive rates—they’ll need value propositions tailored to specific wealth segments.

Geography Still Matters

While the five largest states—California, Florida, Texas, New York, and Illinois—remain key financial markets, some unexpected players are emerging in terms of median asset value. States like Connecticut, Massachusetts, New Jersey, and even Hawaii have strong concentrations of affluent households.

At the metro level, cities like Los Angeles, New York, Chicago, and Dallas are showing the highest growth among affluent populations. Even with headlines about wealth leaving California, the numbers show LA and San Francisco remain powerful wealth centers worth targeting.

Strategic Takeaways for Marketers

Ian offered a smart, three-step approach for financial marketers looking to engage affluent or high-potential consumers:

1. Start with Geography: Identify the zip codes or Designated Market Areas where high-wealth households reside—especially in areas with rising affluence.

2. Analyze Asset Mix: Understand which households are deposit-heavy vs. investment-heavy. This allows for product-specific targeting (e.g., high-yield savings vs. investment accounts).

3. Tailor Messaging: Use segmentation to craft messages that speak directly to the life stages, behaviors, and priorities of your target audience.

This approach allows marketers to not only find the right consumers, but also communicate in ways that resonate—and convert.

Looking Ahead: What’s in Store for 2025 and Beyond?

As we move through the second half of 2025 and into 2026, Ian forsees continued—but uneven—growth. While investments are likely to remain the main driver of wealth, deposits may continue to stagnate. Financial institutions will need to work harder—and smarter—to attract and retain depositors.

Much will also depend on the economic environment. Significant shifts could alter the investment landscape, tax incentives, and even consumer behavior.

Final Thoughts

The key message from this episode is clear: the post-COVID economy has created winners—not just across income levels, but across age groups, geographies, and asset types. Financial institutions and marketers that take a data-driven, segmented approach to understanding their audiences will be best positioned to thrive in this uneven recovery.

If you haven’t already, be sure to listen to the full episode for more insights and practical advice from Ian Wright—and reach out to us at RiskAdvisors@equifax.com with your thoughts or questions.