Millennials are changing investor behaviour and there are massive growth opportunities for those companies looking to attract retail investors who choose to fine-tune their millennial investment marketing strategies.
The composition of investors in the retail investor community is changing, with millennials poised to become an increasingly important client target market. For companies seeking to tap into this burgeoning and lucrative target market, it is critical to develop an investment communication and financial branding strategy that will be reflective of the needs and wants of these new types of investors. Core provides some powerful insights for retail investment providers who have a focus on providing for a new set of requirements from this expanding and evolving demographic.
Millennials, also known as Generation Y (or simply Gen Y), are the demographic cohort following Generation X and preceding Generation Z. Born between the early 1980s to 2000, this generation is generally marked by elevated usage of and familiarity with the Internet, mobile devices, and social media, which is why they are sometimes termed ‘digital natives’. Aged between 20 to 44 years old, most are now entering the peaks of their careers, have some savings and are consuming information about everything online, including stocks. This is why, in order to attract millennials as retail investors, you need to be in the digital space.
“This generation is generally marked by elevated usage of and familiarity with the Internet, mobile devices, and social media, which is why they are sometimes termed ‘digital natives’.”
Understanding millennial retail investors
A good start is understanding their mind space. The Great Recession and, more recently, the coronavirus recession, have had a major impact on this generation because they have caused historically high levels of unemployment among young people. In general, economic growth and youth unemployment are negatively correlated, meaning young workers have it worse than their elders during a recession.
But the income potentials and purchasing power of this demographic will grow. The needs and investment goals of this demographic might not be what the typical investment advisory firm might expect. Many are predicting the millennial demographic will completely disrupt what have been generally regarded as social and consumption trends. It is now imperative that companies, asset managers and capital raisers acquire a better understanding of what this subset of the population needs, how they think, and to ensure that their strategies are closely aligned with those very same requirements.
How to approach millennials
Bottom line, millennials are economically optimistic, but they have low financial confidence, which manifests in conservative investing habits. You just need to know how to reach them. According to a study by Wells Fargo – ‘Millennials, Money and Happiness Factor’ there are 80 million+ millennials in the US alone, with an estimated wealth transfer of USD30-trillion over the next few decades. So it’s not hard to see why it is becoming increasingly important to understand the differences in both the functional and emotional needs of millennials. The trick is to hone in on their economic optimism, nurture their trust, and boost their confidence by using the right marketing tools.
Key to all this is building trust in your financial investment options. To earn that trust, the retail investment industry needs to score points among millennials by making them a priority. Some ways that investment branding strategies can build trust with this demographic include:
- Authentic communication
- Purpose-driven investing
- Impactful financial design and user experience
- User-centric educational investment marketing materials
Also see ‘How transparency drives investor engagement’
How to engage millennials
Millennial retail investors use digital media solutions to seek out information on their investment opportunities. Technology has given these young adults the power to access information through the convenience of their smartphones, handing them an abundance of knowledge on how to navigate their investments. In many ways, this has driven them away from financial advisors and toward a self-directed approach. Facebook, Twitter, LinkedIn, Reddit, Instagram, Google, and other digital solutions are in the average retail investor’s toolkit.
Millennial investors crave reliable, trustworthy financial content marketing. Your investors’ trust in you will hinge upon the effectiveness of your investment brand strategy. Your brand is going to be representative of their first impression or interaction with your company. Millennials are looking for excellent app experiences, beautiful websites, and marketing materials that communicates to their needs. Great design, even in the financial services space, is essential.
Some good indicators of a modern, fresh design include:
- A mobile-optimised responsive financial website
- Investment marketing materials created on professional-design programs
- Creating memorable visuals
- Clean, easy to discern layouts across investment marketing content
- Ultra-minimalist navigation
Developing a clear investor marketing strategy and planning investor communications for your company to include digital relations can make reaching a wide base of investors possible. Some processes can even be automated to reach your audience. Detailed analytics tools help you see what is working and what isn’t so you can adjust your strategy. These digital solutions save you both time and money, compared to traditional IR strategies which require face-to-face meetings and expensive travel.
Investment marketing today must take digital technology as well as investment desires into account, and working with a consultancy firm specialising in investment and financial branding and marketing strategies can be extremely advantageous. For a comprehensive investor communications strategy that will effectively tackle your marketing concerns, speak to a Core Consultants’ representative
