The Millennial Communications Challenge Facing the Financial Services Industry
Millennials have already surpassed baby boomers as the largest living generation in America. However, in many cases, these young adults are being misunderstood and underserved by financial services firms.
Why are Millennials understated and underserved?
As a young generation still building their wealth, many Millennials are working to establish their financial independence. Some are even starting to consider building a portfolio of investments, which means this audience should be considered an important market for financial services firms.
There are many qualities in Millennials that suggest this generation will prove to be a financially savvy and lucrative customer base for the financial services industry:
- They value education and believe that putting themselves first is key.
- They are putting their money into businesses that focus on the importance of social responsibility.
- They believe in the power of technology and are more willing to put their trust in digital platforms.
Millennials were taught young to focus on the future and are already ahead of the game in planning for their and future generations’ well-being.
Understanding the facts
According to a study conducted by our Financial Services Sector, many advisors are having difficulties appealing to Millennials for the following reasons:
- Eight in 10 Millennials believe their American Dream is possible and it is about much more than money.
- Millennials are interested in reaching their key personal goals faster than financial goals.
- Millennials are not confident about retirement. Many are not yet saving for the long-term.
- Millennials want transparency. They want an advisor who knows what they want and works on not only informing them but also helping them achieve their plans.
Engaging Millennials early on
If financial services firms currently serve a family with Millennials, they should consider including them in client meetings, calls, etc. This will provide an opportunity for the firm to retain that portfolio for the future generation and will broaden the Millennial’s understanding of investing. Hopefully, that will then turn into the Millennial also becoming a client when they are financially capable.
How firms can attract Millennial clients
If you are an advisor, you should consider this:
Communication is key with any generation but especially with Millennials. Engaging video content that informs them about services and products is more likely to spark interest and awareness in what a financial services firm has to say.
Since this generation is at the beginning stages of financial planning, now is the time to increase awareness and education on the necessary next steps.
Acorns, a robo-advising service, has done a good job appealing to many Millennials. Acorns rounds-up its clients purchases to the nearest dollar then invests their spare change in a diversified portfolio — a stress less and carefree way to dip your toes into the waters of investing. But as this generation begins to age, acquiring or inheriting more annual income, they become interested in ways to achieve long term goals.
Engaging with Millennials through new channels:
Financial Services firms should consider investing in developing communications programs that leverage channels Millennials are using, such as Snapchat, Instagram and Facebook. A Snapchat geofilter around an office location can be an effective tool to engage Millennial audiences. Similarly, advertising in paid sponsored Facebook campaigns can help firms slowly connect with younger audiences as well. For financial services firms, increasing visibility and allowing current clients to express their opinions about services will work to promote engagement and increase clientele.
Structure your products and offerings to meet the long-term goals of Millennials:
Millennials are interested in working hard now in order to comfortably retire later — work hard in your 20’s and 30’s, plan and invest in your 40’s and 50’s and fully retire in your 60’s and 70’s. When developing and structuring products and associated marketing campaigns, firms should focus on how great Millennials’ lives will be when they have plenty of money to retire and not have to worry about finances.
Millennials are more willing to try things out, they are not afraid of risk and are open to different opportunities, as demonstrated by a recent study published by Pricewaterhouse Coopers and the Global Financial Literary Exchange at George Washington University that found, “42 percent of Millennials have used alternate financial services within the past five years.”
Convenience is key to many Millennials. If an option is available digitally and will provide all the information needed via a smartphone or tablet, that is the company they will chose.
Originally published at www.edelman.com on December 19, 2016.