An Open Letter to Advisory Firms Losing the Millennial Marketing Battle

An Open Letter to Advisory Firms Losing the Millennial Marketing Battle

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Dear Adviser,

I’ve spent my whole life as a millennial, or at least as long as the generational classification has existed, but you haven’t seemed to notice. Your ads and your marketing materials prove you don’t understand me.

My financial decisions don’t make sense to you, because you don’t understand the context in which they were made. You probably don’t understand why I’ll spend $50 on a bottle of wine, $100 on dinner on Saturday night and $75 on brunch the next morning, but I won’t pay $80 per month for cable. While logic would suggest that the former expenditures dictate the latter deficit, the real explanation is that substitute goods are available.

I grew up with Napster. I helped kill fye and Sam Goody. Why? Because it was free and easy. I could download any album or movie for free in a matter of minutes. So when it comes to paying for cable, it’s not that I can’t afford it – it’s that I don’t value the service at the market rate. I prefer cheaper alternatives that offer similar value. But, I can’t get free wine and I have yet to find a low-cost, fine dining experience.

Further compounding my preference for value is the fact that, for the majority of my adult life, I’ve had the ability to instantly check prices on my smartphone before I buy. I have no brand loyalty. I’m not above walking out of a store when I pull out my phone and find a better price online. More often than not, I can wait for two-day shipping.

Adviser translation: If you don’t have financial products or advice that add value for me, I’m going to buy low-cost ETFs or mutual funds. Passive funds are cheap, easy and readily available. Vanguard is Napster for advisers. If you can’t give me value above what I pay for low-cost funds, then I have no reason to buy your product. And remember  if there are substitute goods available, I don’t need to go to your competitor’s office or request a prospectus by mail to find the costs. I can find fees on my phone while I sit in your office. If I find a better offer, I won’t hesitate to walk out of your office and buy lower cost funds on my smartphone from the parking lot. Maybe that makes me a sophisticated investor, or maybe it’s become too easy not to be.

Yet, value is only one piece of the puzzle when it comes to understanding me. Advisers also need to recognize that I have a general distrust of all things Wall Street. According to a 2016 survey by Harvard University Institute of Politics, I’m not alone. In fact, only 11 percent of millennials surveyed said that they trust Wall Street to do the right thing all or most of the time. Even more alarming is that 42 percent of millennials said they never trust Wall Street to do the right thing.

The explanation is simple. We watched as our parents profited from the Clinton Era expansion in the 90s, only to get crushed in the Dot Com bubble. By the time that 9/11 cleared and conditions started to feel “normal” again, the housing crisis lead to the Great Financial Crisis. Consequently, the market narrative throughout the entire duration of my memory has been dominated by two major asset bubbles. Today, with many indices at all-time highs again, I can’t help but worry that I will end up in the same boat as my parents – worrying that I will be forced to delay retirement because the latest asset bubble coincided with my retirement plans, leaving me at a loss while Wall Street profits.

Adviser translation: I understand that investing has risks. I get that markets are cyclical. But advisers need to understand that I’m more skeptical of the people involved in the financial industry than the actual products they sell. This doesn’t mean that I believe everyone working in finance is inherently untrustworthy, but my cynicism is the manifestation of an availability bias that skews my default sentiment toward an overemphasis on the outcomes of recent events, namely the most recent financial crisis. I’m looking for an adviser who presents genuineness from the very first second. There are no “genuine” mutual funds or ETFs, but there are genuine people. I want to know that my money is being managed by people who only have my best interest in mind. As soon as there is any question about intention, you’ve lost my attention. One of the best ways to earn my trust is transparency. Performance-based fee structures can also help convince me that our incentives are aligned. Most importantly, I want an adviser who is upfront and articulate about where they add value and where they do not.

My final suggestion is that you stop broadly catering your marketing efforts to millennials. I was born in 1986. I had to yell, “Mom, hang up the phone! I’m on the internet,” until the early 2000s when we finally got DSL. I didn’t get a cell phone until I was in high school. And, yes, my classmates were amazed that my Nokia 5110 had snake.

But what about the kid born in 1999? They never saw a bag phone. Fax was dead before they ever used it to order lunch. They grew up on smart phones and broadband internet and have never heard the sound of dial up router. That fact alone helps explain why you won’t find me regularly checking Instagram or Snapchat, but many of my younger millennial brethren use those platforms incessantly.

Adviser Translation: Millennials are the largest and most diverse generation in history. If you look at millennials as a homogenous group, you will miss your target because your message will lack nuance and personality. I’ve worked with many advisers who think they are well positioned to attract a younger client base simply because “they’re on social media.” The reality is that the vast majority of brands don’t get traction simply by posting on Facebook a few times per week. If you’re going to stand out, you need to start with a more specific targeted audience. Take time to understand our motivations. They probably aren’t that different from your own motivations. Keep in mind that you experienced the last 20 years, but for millennials, the last 20 years was their only experience.

The bottom line for advisers who want to market to millennials is that context always matters. Gurus and marketers throw around buzzwords like “authenticity” and “influencers,” but all too often they overgeneralize the target group and fail to integrate the experiences that motivate behavior.

To avoid these pitfalls, pick a specific group where you feel you can add value. For example, target “single, college educated, urban, females, between the ages of 27 and 31.” Avoid weak target groups like “millennials with retirement savings who want help investing.”

Once you have an audience, find a way to state your value proposition that appeals to it. If you can’t state your value proposition in a single tweet and justify why it is particularly appealing to your specific target audience, you need to go back to the drawing board.

But I worry that great marketing might not be enough. The savviest advisers are already demonstrating their value to millennials. They may not be using the same methods and business models, but they are making an effort to build trust with new audiences.

Adviser translation: Some firms are offering a robo adviser to the children of existing clients. The idea is simple – get kids hooked on investing early by giving them an early stake in their financial future. In doing so, advisers are building trust by demonstrating the benefits of investing. And what better way to tap into your existing client network? Also using technology to strengthen client relationships is United Capital’s Financial Life Management. The product is a suite of applications that advisers can use to shift the conversation from “What financial products fit a client’s risk profile?” to “What life choices matter most to the client?” This approach builds genuine client relationships and incorporates gamification elements that make the process feel more like deep self-reflection and less of an arduous chore. Finally, there are advisers who are attracting millennial clients by offering flat fee financial advice. XY Planning Network is one way that advisers can tap into this market. Again, the goal is building trust with potential clients early. For advisers, giving up minimums and commissions today could mean a much larger client base tomorrow.

The key seems to be offering millennials the tools to start investing today, while maintaining a relationship so that you’re first in line when they have more complicated financial needs in the future.

If you can digest all of that, you’re well on your way to better understanding me and having a shot at being my advisor.

Sincerely,

Alex

Joe Anthony
Public Relations
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Joe Anthony is a PR Strategist with 12 years experience in public relations and financial communications. He is responsible for leading the agency's financial services PR unit ... Click for full bio

Advisors: How to Prepare Before Calling an Agency

Advisors: How to Prepare Before Calling an Agency

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You’ve read my other posts:

Related: Should You Work with a Marketing or PR Agency, or Neither?

Related: There's No Point in Paying for Outside Advice If You Have No Intention of Listening to It

And you’re finally ready to talk to a marketing or PR agency.

Or are you?

I’m amazed how many prospects contact an agency without any advance preparation whatsoever. It’s not just that they don’t know what services the agency offers. The real issue is, they can’t even explain why they’re calling in the first place.

You might be raising an eyebrow at my suggestion that you actually need to prepare before calling a vendor. Don’t. I want to help you maximize your time, and potential investment.

Here’s why: The best way to use a vendor’s time during an initial call is to conduct a mini-discovery session. At FiComm, we will ask: What is your vision for your business? How do your services address your market’s needs? Where are you headed as a company? What will get you to the next level? What marketing obstacles do you face? That information shapes our remarks, ensuring that everything we say will be directly relevant to you.

Many advisors find those initial conversations enormously valuable in their own right. They help clarify their thinking. But others feel put on the spot. They freeze. They respond in standard brochure-speak: “We were founded in 1984, we have four advisors, we serve 200 households with an average account size of $400,000.”

Or they say, “We were hoping you would tell us the answers to those questions.”

Well, that’s helpful.

Imagine you’re meeting a potential wealth management client for the first time. They have $700,000 in a brokerage account, $400,000 in a retirement account, two kids, a dog and a house in L.A. Great. You start by asking their goals for themselves, their money, and their family.

Puzzled, they tilt their heads and say, “We were hoping you would tell us.”

See what I mean? How can you possibly come up with a solution for clients who can’t even articulate their goals, or speak to their financial pain points?

The same is true for us vendors. Before we can help you, we need to know where your business is going and how you think marketing can help you get there. The answers don’t have to be “right” (and we’ll help you get there), but it you come prepared to participate, our conversations can be very fruitful. If you don’t—well, it’s hard to deliver value for you. We know we’ll constantly have to prove ourselves and remind you why you hired us.

“But, Megan,” some advisors say, “we’re not ready for that. We’re just trying to understand the basics. How will we learn if you don’t tell us?”

If you’re calling an agency just to get a general marketing education, then that’s what you’ll get—general information, most of it irrelevant to you, and lacking the specifics you’re really looking for.

So, don’t call an agency to be your marketing tutor. Instead, read. Advisors have never had better access to self-help insights and information—through trade pubs, custodian relationships, blogs, podcasts, other advisors and industry pundits. Be curious. Be inquisitive. If you hear something on a podcast that intrigues you, follow the host back to LinkedIn. Read what they write there. Email your questions. Attend a webinar. Be an active participant at industry events.

At some point, you’ll understand the basics. You’ll have identified your own issues. And narrowed down your questions. Then, finally, you’ll be ready to call an agency.

Instead of saying, “Tell us what we need,” you’ll say, “We need help with this.

Megan Carpenter
Marketing
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Megan is CEO & Co-Founder at FiComm Partners, LLC. Her team develops winning communications strategies for entrepreneurs in the independent advisory community, and busines ... Click for full bio