As Millennials age, with some already entering their late 30s, they stand to inherit a staggering amount of assets—by some accounts, around $30 trillion worth over the next few decades. They already control around $2 trillion in assets, and that’s just in North America.
It’s become something of a commonplace to observe that Millennials, the first so-called “digital natives,” are in many respects quite different from the generations that preceded them. They wait longer to get married or buy a house, are more likely to live at home with their parents, and are much less interested in buying big-ticket items such as cars. When it comes to investing, the differences are even more stark: having lived through major boom-bust economic cycles, they tend to be skeptical of stock market investments, with fully half of high-net-worth Millennials fearing they may lose money by investing in equities. Perhaps most interestingly, in spite of their substantial reservations when it comes to stock market investing, Millennials have embraced seemingly-riskier investments focused on making a positive environmental or social impact.
Millennials have also come of age in an environment all-but saturated with advertising, branding, and marketing. The result is a generation with particularly sophisticated “bullshit detectors”—notably suspicious of traditional marketing appeals and imagery. For guidance, they often turn to trusted sources within social media, and are willing to put in significant legwork in the form of research to find the best value in their purchases.
What does this all mean for fund issuers? Clearly, Millennials represent an incredible opportunity for the financial world, but are also, with their significantly different preferences, concerns, and outlooks, uncharted territory. It is with this in mind that we present to you, in two parts, the 4 ways fund issuers are missing the mark with Millennials. Part 1, below, addresses the first two items. In the next installment, we will address the final two.
4. Archaic marketing materials
What’s the first thing that pops into your head when you’re thinking of marketing materials? Is it a slick website and great brochures? Is it fund fact sheets or infographics? You wouldn’t be wrong in thinking so. Strong marketing materials and collateral are absolutely crucial in telling your firm’s story—what sets your offerings apart from the rest, what your firm stands for, and why prospective investors should buy your products.
However, it’s amazing just how many issuers, when it comes to design, fall into the trap of telling the same old story, representing themselves as just one more Wall Street firm with a muted gray and blue color palette, stock photography of skyscrapers, and old men in suits shaking hands. There are undoubtedly hundreds of companies whose stories fit this bland imagery, but what does it fundamentally say about what your company does, who works there, and what you have to offer? These days, not a whole lot. A prospective Millennial investor visiting a fund issuer website chock-full of stock photography and photos of dour old men is likely to conclude that this company is the same as all of its competitors, regardless of the funds on offer.
To avoid this scenario, fund issuers should think carefully about what their firm represents and what story they’d like to tell about their products and services. Instead of somber, dark blacks or blues, distinguish your company with a bright, simple color palette that sets you apart from the rest. Instead of generic imagery, think about what photos truly represent the heart and soul of your brand. By being true to your company’s ethos and product offerings, and by using more approachable, nontraditional imagery and colors, you will have an easier time projecting a Millennial-friendly image in your marketing collateral and website.
3. Poor use of social media
There are few things that raises hackles amongst marketing people in the finance industry like these two little words: “social media.” Is it really all it’s cracked up to be? And how can a fund issuer operate within the narrowly-defined bounds of compliance while still being spontaneous, consistent, and engaging?
Unfortunately for the old guard, Millennials love their social media. According to a recent report by the American Press Institute, 88% of Millennials get their news from Facebook, and 57% of Millennials check into Facebook at least once a day. The younger the cohort of Millennials, the stronger the trend: the average 18-21 year old uses 3.7 social networks out of the 7 included in the study.
So how is a fund issuer to harness this new, exciting medium? To start with, it’s less straightforward with fund issuers than with other kinds of companies. For example, an apparel company typically does not have to get public communications cleared by compliance before they go out. This can make it difficult for social media posts to appear spontaneous and “of-the-moment.” One useful workaround is to brainstorm a number of “evergreen” social media posts, submit them all at once to compliance, and then schedule them to go out at measured intervals over a predefined period of time. Think of it as a social media content calendar. This allows for some semblance of spontaneity, as well as maintaining regularly-spaced posts, which can help expand the number of followers.
By establishing a broader, more dynamic social media presence, fund issuers stand a better chance of reaching that coveted Millennial demographic, which is more reliant on social media than any previous generation.
In the forthcoming second part of this article, we will address two other important ways fund issuers are “missing the mark” with Millennials.