An Open Letter to Advisory Firms Losing the Millennial Marketing Battle

An Open Letter to Advisory Firms Losing the Millennial Marketing Battle

Written by: 

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.



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

Top Picks in Asset Allocation

Top Picks in Asset Allocation

Written b: John Bilton, Head of Global Multi-Asset Strategy, Multi-Asset Solutions

As global growth broadens out and the reflation theme gains traction, the outlook brightens for risky assets

Four times a year, our Multi-Asset Solutions team holds a two-day-long Strategy Summit where senior portfolio managers and strategists discuss the economic and market outlook. After a rigorous examination of a wide range of quantitative and qualitative measures and some spirited debate, the team establishes key themes and determines its current views on asset allocation. Those views will be reflected across multi-asset portfolios managed by the team.

From our most recent summit, held in early March, here are key themes and their macro and asset class implications:

Key themes and their implications

Asset allocation views

For the first time in seven years, we see growing evidence that we may get a more familiar end to this business cycle. After feeling our way through a brave new world of negative rates and “lower for longer,” we’re dusting off the late-cycle playbook and familiarizing ourselves once again with the old normal. That is not to say that we see an imminent lurch toward the tail end of the cycle and the inevitable events that follow. Crucially, with growth broadening out and policy tightening only glacially, we see a gradual transition to late cycle and a steady rise in yields that, recent price action suggests, should not scare the horses in the equity markets.

If it all sounds a bit too Goldilocks, it’s worth reflecting that, in the end, this is what policymakers are paid to deliver. While there are persistent event risks in Europe and the policies of the Trump administration remain rather fluid, the underlying pace of economic growth is reassuring and the trajectory of U.S. rate hikes is relatively accommodative by any reasonable measure. So even if stock markets, which have performed robustly so far this year, are perhaps due a pause, our conviction is firming that risk asset markets can continue to deliver throughout 2017.

Economic data so far this year have surprised to the upside in both their level and their breadth. Forward-looking indicators suggest that this period of trend-like global growth can persist through 2017, and risks are more skewed to the upside. The U.S. economy’s mid-cycle phase will likely morph toward late cycle during the year, but there are few signs yet of the late-cycle exuberance that tends to precede a recession. This is keeping the Federal Reserve (Fed) rather restrained, and with three rate hikes on the cards for this year and three more in 2018, it remains plausible that this cycle could set records for its length.

Investment implications

Our asset allocation reflects a growing confidence that economic momentum will broaden out further over the year. We increase conviction in our equity overweight (OW), and while equities may be due a period of consolidation, we see stock markets performing well over 2017. We remain OW U.S. and emerging market equity, and increase our OW to Japanese stocks, which have attractive earnings momentum; we also upgrade Asia Pacific ex-Japan equity to OW given the better data from China. European equity, while cheap, is exposed to risks around the French election, so for now we keep our neutral stance. UK stocks are our sole underweight (UW), as we expect support from the weak pound to be increasingly dominated by the economic challenges of Brexit. On balance, diversification broadly across regions is our favored way to reflect an equity OW in today’s more upbeat global environment.

With Fed hikes on the horizon, we are hardening our UW stance on duration, but, to be clear, we think that fears of a sharp rise in yields are wide of the mark. Instead, a grind higher in global yields, roughly in line with forwards, reasonably reflects the gradually shifting policy environment. In these circumstances, we expect credit to outperform duration, and although high valuations across credit markets are prompting a greater tone of caution, we maintain our OW to credit.

For the U.S. dollar, the offsetting forces of rising U.S. rates and better global growth probably leave the greenback range-bound. Event risks in Europe could see the dollar rise modestly in the short term, but repeating the sharp and broad-based rally of 2014-15 looks unlikely. A more stable dollar and trend-like global growth create a benign backdrop for emerging markets and commodities alike, leading us to close our EM debt UW and maintain a neutral on the commodity complex.

Our portfolio reflects a world of better growth that is progressing toward later cycle. The biggest threats to this would be a sharp rise in the dollar or a political crisis in Europe, while a further increase in corporate confidence or bigger-than-expected fiscal stimulus are upside risks. As we move toward a more “normal” late-cycle phase than we dared hope for a year back, fears over excessive policy tightening snuffing out the cycle will grow. But after several years of coaxing the economy back to health, the Fed, in its current form, will be nothing if not measured..

Learn how to effectively allocate your client’s portfolio here.


This document is a general communication being provided for informational purposes only.  It is educational in nature and not designed to be a recommendation for any specific investment product, strategy, plan feature or other purpose. Any examples used are generic, hypothetical and for illustration purposes only. Prior to making any investment or financial decisions, an investor should seek individualized advice from a personal financial, legal, tax and other professional advisors that take into account all of the particular facts and circumstances of an investor’s own situation. 

J.P. Morgan Asset Management is the marketing name for the asset  management business of JPMorgan Chase & Co and its affiliates worldwide. Copyright 2017 JPMorgan Chase & Co. All rights reserved.
J.P. Morgan Asset Management
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See how ETFs differ from other investment vehicles, learn how to evaluate them, and discover how ETFs can be used effectively to achieve a diversity of investment strategies. ... Click for full bio