"Ethical" might not be the first word to come to mind when we think about investment brands, but if any industry should strive to establish a reputation of trust and confidence, it's financial services.
People understandably feel a deep and personal connection to their finances. We work hard for our money, rely on our money, and for centuries have defined ourselves by how much we make and what we could do with that money. Marketers working at financial brands understand the need to build audience credibility with their messaging as they work to carve out niches in a space dominated by mounds of data, giant established institutions, disruptive technology, and more than a few cults of personality.
The question of how financial brands communicate is now even more top-of-mind as millennials prepare to enter their first year as the largest population segment on earth and start making long-term investment decisions. Is long-running institutional heritage or confident swagger enough to attract this new crowd of investors, or will they demand something new from their financial partners?
Image attribution: Elevate
A Need for Education and Accountability
As with all things financial, a great place to start is by looking at trends.
In a 2017 report, Deloitte found that millennials differ from their older counterparts in a number of key ways. In terms of their finances, millennials displayed hands-on attitudes, such as interest in starting a business for themselves and preferring banking institutions that gave them immediate access to their finances via better digital tools.
However, this interest in finance does not always translate to an understanding of the industry. A recent report from the National Endowment for Financial Education found that while a large number of millennials are confident in their financial knowledge, a much smaller percentage could actually answer basic personal finance questions. In short, millennials are highly engaged with the idea of interacting with their money, and many believe they already are. But there remains an enormous education gap that brands have the opportunity to address.
The second key component to understand here is institutional distrust. Having grown up watching a number of financial crises-from market crashes and banking scandals to the great recession of 2008-many millennials have developed a strong distrust of large, established financial institutions and advisory groups. And by distrust I don't mean mild suspicion. I mean that according to a LinkedIn study, 71 percent of millennials reported they would rather attend a painful dental appointment than listen to their bank.
Further, millennials also display a clear penchant towards sustainable and ethical investing compared to other populations. This means that millennial audiences are more willing to take a (small) financial hit, if in return they know they're backing a business that matches their ideals or supports intentionally sustainable practices.
It is still possible to navigate marketing to millennials in the financial space, but it requires brands to think about tying messages to their audience's narratives and being radically transparent compared to more established institutions. It's a hard balance to strike, leaving plenty of room for new brands to explore opportunities-and for established brands to reconsider their communication strategy.
Growing Trust, Growing Accounts, Growing Audience
Millennials recently came into force as a primary economic market, and the finance industry is playing a bit of catch-up as they watch to see if millennials will buy houses, whether they'll continue to hold cash instead of securities, and whether or not financial advisors are going to be replaced by YouTube videos and robo-investors.
A number of brands are leading the way when it comes to meeting the needs and diverse perspectives of this increasingly wealthy audience.
Ellevest, a robo-investment platform, seeks to distinguish itself from competitors through its value-based initiatives and specialized understanding of its audience.
The company is a vocal proponent of accessible and ethical investing practices, similar to a handful of other automated platforms like Wealthsimple. But their largest distinguisher is that they are an investment platform for women professionals, run by women professionals. Ellevest is able to both model their product and message against the narratives and needs of a woefully underserved population, while also expressly calling out the industry's gender-based inequalities that have damaged certain perceptions of the financial sphere as a whole.
Beyond the product itself, Ellevest has put considerable resources behind building an education and finance news portal for their visitors that supports their differentiation. The result is a brand that's able to quickly win trust and educate their audience while circumventing many of the typical concerns that millennials face.
Another recent addition to the field is Simply Wall St. Their product is tackling financial advising-a service whose future with millennials is very much in flux-by leaning into that unique gap between high-touch financial confidence and low financial knowledge that characterizes many millennial investors.
Simply Wall St. takes stock analysis and turns it into a digital interface of graphics, user-generated portfolios, and dynamically populated content that lets users focus more on understanding the big picture around their investments as opposed to diving into pages of statistics.
Between providing learning material throughout the platform and numerous ways to filter and find ethical investments, the brand scratches a unique financial itch for millennials. The takeaways here are pretty clear: Images, interface, and narrative are rapidly replacing long-winded prospectuses for the average investor. Brands will need to convey information creatively and in a trustworthy way if they want to keep up.
Image attribution: Cortney White
Continued Change Well into the Future
There is a last piece of caution to consider whenever we think about marketing to millennials as a whole. While we can study and describe many millennial preferences and behaviors related to finance, there are an enormous number of pressures well beyond age bracket that contribute to why these behaviors exist. This means that preferences will absolutely continue to change over time, and that as these consumers grow in prominence in the market, they will continue to segment out more in terms of their needs and desires.
One way we're seeing this already is the divide between younger millennials in their twenties addressing student loan debt, while millennials in their thirties are tackling mid-career mobility and the complexities of home-buying.
The more your brand is able to specifically understand your audience segments within the millennial population, the better success you will have. Financial performance remains important, but accessibility, trustworthiness, and a relatable narrative are the three key differentiators actually driving millennial audiences today. So what story does your financial brand have to tell?
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Featured image attribution: Stephen Cook