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
Twitter Email

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

China's Push Toward Excellence Delivers a Global Robotics Investment Opportunity

China's Push Toward Excellence Delivers a Global Robotics Investment Opportunity

Written by: Jeremie Capron

China is on a mission to change its reputation from a manufacturer of cheap, mass-produced goods to a world leader in high quality manufacturing. If that surprises you, you’re not the only one.

For decades, China has been synonymous with the word cheap. But times are changing, and much of that change is reliant on the adoption of robotics, automation, and artificial intelligence, or RAAI (pronounced “ray”). For investors, this shift is driving a major opportunity to capture growth and returns rooted in China’s rapidly increasing demand for RAAI technologies.

You may have heard of ‘Made in China 2025,’ the strategy announced in 2015 by the central government aimed at remaking its industrial sector into a global leader in high-technology products and advanced manufacturing techniques. Unlike some public relations announcements, this one is much more than just a marketing tagline. Heavily subsidized by the Chinese government, the program is focused on generating major investments in automated manufacturing processes, also referred to as Industry 4.0 technologies, in an effort to drive a massive transformation across every sector of manufacturing. The program aims to overhaul the infrastructure of China’s manufacturing industry by not only driving down costs, but also—and perhaps most importantly—by improving the quality of everything it manufactures, from textiles to automobiles to electronic components.

Already, China has become what is arguably the most exciting robotics market in the world. The numbers speak for themselves. In 2016 alone, more than 87,000 robots were sold in the country, representing a year-over-year increase of 27%, according to the International Federation of Robotics. Last month’s World Robot Conference 2017 in Beijing brought together nearly 300 artificial intelligence (AI) specialists and representatives of over 150 robotics enterprises, making it one of the world’s largest robotics-focused conference in the world to date. That’s quite a transition for a country that wasn’t even on the map in the area of robotics only a decade ago.

As impressive as that may be, what’s even more exciting for anyone with an eye on the robotics industry is the fact that this growth represents only a tiny fraction of the potential for robotics penetration across China’s manufacturing facilities—and for investors in the companies that are delivering or are poised to deliver on the promise of RAAI-driven manufacturing advancements.

Despite its commitment to leverage the power of robotics, automation and AI to meet its aggressive ‘Made in China 2025’ goals, at the moment China has only 1 robot in place for every 250 manufacturing workers. Compare that to countries like Germany and Japan, where manufacturers utilize an average of one robot for every 30 human workers. Even if China were simply trying to catch up to other countries’ use of robotics, those numbers would signal immense near-term growth. But China is on a mission to do much more than achieve the status quo. The result? According to a recent report by the International Federation of Robotics (IFR), in 2019 as much as 40% of the worldwide market volume of industrial robots could be sold in China alone.

To understand how the country can support such grand growth, just take a look at where and why robotics is being applied today. While the automotive sector has historically been the largest buyer of robots, China’s strategy reaches far and wide to include a wide variety of future-oriented manufacturing processes and industries.

Related: Smooth Tomorrow's Market Volatility With a Smart Approach to Robotics & AI

Electronics is a key example. In fact, the electrical and electronics industry surpassed the automotive industry as the top buyer of robotics in 2016, with sales up 75% to almost 30,000 units. Assemblers such as Foxconn rely on thousands of workers to assemble today’s new iPhones. Until recently, the assembly of these highly delicate components required a level of human dexterity that robots simply could not match, as well as human vision to help ensure accuracy and quality. But recent advancements in robotics are changing all that. Industrial robots already have the ability to handle many of the miniature components in today’s smart phones. Very soon, these robots are expected to have the skills to bolster the human workforce, significantly increasing manufacturing capacity. Newer, more dexterous industrial robots are expected to significantly reduce human error during the assembly process of even the most fragile components, including the recently announced OLED (organic light-emitting diode) screens that Samsung and Apple introduced on their latest mobile devices including the iPhone X. Advancements in computer vision are transforming how critical quality checks are performed on these and many other electronic devices. All of these innovations are coming together at just the right time for a country that is striving to create the world’s most advanced manufacturing climate.

Clearly, China’s trajectory in the area of RAAI is in hyper drive. For investors who are seeking a tool to leverage this opportunity in an intelligent and perhaps unexpected way, the ROBO Global Robotics & Automation Index may help. The ROBO Index already offers a vast exposure to China’s potential growth due to the depth and breadth of the robotics and automation supply chain. As China continues to improve its manufacturing processes to meet its 2025 initiative, every supplier across China’s far-reaching supply chains will benefit. Wherever they are located, suppliers of RAAI-related components—reduction gears, sensors, linear motion systems, controllers, and so much more—are bracing for spikes in demand as China pushes to turn its dream into a reality.

Today, around 13% of the revenues generated by the ROBO Global Index members are driven by China’s investments in robotics and automation. Tomorrow? It’s hard to say. But one thing is for certain: China’s commitment to improving the quality and cost-efficiency of its manufacturing facilities is showing no signs of slowing down—and its reliance on robotics, automation, and artificial intelligence is vital to its success.

Want all the details? Download the ROBO Global Investment Report - Summer Brings Best ROBO Earnings in Six Years or visit us here.

ROBO Global
Robotics and AI
Twitter Email

ROBO Global LLC is the creator of the ROBO Global® Robotics and Automation Index series, which provides comprehensive, transparent and diversified benchmarks representing the ... Click for full bio