Northwestern Mutual Life's LearnVest Acquisition: Lessons for RIAs

Late this afternoon, the websites and Twitter feeds of both mainstream business and niche financial industry publications were blowing up with the news around yet another digital advice/financial planning and information company getting bought up by a more conventional financial services company. LearnVest, the "innovative financial planning platform" launched by uber-Millenial Alexa von Tobel, has agreed to become part of Northwestern Mutual Life's family.

Score this a win for the "if you can't beat 'em, buy 'em" camp. Just like Fidelity's takeout of eMoney (adviser tech/software) and Janus' purchase of Velocity Shares (ETFs), the acquisition of LearnVest by Northwestern Mutual is evidence that older, established financial industry firms are buying their way into the more innovative ends of the business. Why? Because they have to and they recognize it's better to play catch up than not play at all.

For the independently owned and operated RIA firms witnessing this quick succession of deals, take heed: you can ill-afford to delay your own adaptation to what's next; the time is now to ready your firm for the opportunities and challenges of today, as well as the yet to appear challenges of tomorrow.

In the case of LearnVest, Northwestern Mutual surmised that the upstart firm is doing a far better job at engaging millenials then the old insurance-oriented financial services behemoth has been. LearnVest has exemplified the best practices of how an RIA should market itself today: sharp multimedia content marketing combined with an assertive voice in the realm of media relations, all the while maintaining engagement with millenials in the places and channels were they are most comfortable.

If you look how LearnVest, Betterment, Mint, Personal Capital and others engage their audiences, they demonstrate a better grasp of the millenial mindset than the big Wall Street firms stocked with MBAs. But those firms are not without insight. Just look at the study released by UBS in 2014 , that showcased these stats:

  • 45 percent of Millennials believe saving is the key to financial success, compared to 39 percent of older generations.
  • Only 28 percent of Millennials see investment as important in long-term financial success, compared to 52 percent of Baby Boomers.
  • The study shows that the mindset is about saving, not investing. But, when was the last time you saw an advertisement from UBS that spoke to this understanding? I am not picking on UBS, but rather using this to underscore why the independent, nimble RIA firms are still in position to catch up to - and in many cases get ahead of - the curve. The facts are that many recognize the need and the challenge to engage a new generation, but many firms haven't fully embraced the call to action.

    I had the fortune today to speak with a group of female leaders of approximately 15 Washington, DC area RIA firms at a session hosted by Schwab Advisor Services. When given the opportunity to share their own points of view, each woman said that they knew they needed to do more to capture the opportunities and meet the challenges that the generational, technological and customer preference shifts were bringing to their business.

    The road map set forth by Alexa von Tobel and LearnVest can be replicated, at least in terms of marketing. If you want to get a sense of how RIA firms are doing it, send me a message about what you are looking for. Or, if you have your own take on the shifting sands of the financial advice business, leave a comment here.