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Marketing to Millennials: The Recession Generation

Asset management firms are discovering that millennials take a different approach to investing than previous generations. This comes as no surprise – each generation has unique characteristics that affect their investment strategies. However, this particular group, composed of those born roughly after 1980, came of age in a specific set of circumstances that may require a certain amount of ingenuity to reach. Millennials are accustomed to consistent access to information. On top of that, they want to play it safe with their hard-earned funds.

Articles abound millennials. Some portray them as self-obsessed – the “me” generation. Others note how they’re likely to live at home for extended periods of time. Additional articles have addressed how this age group has ideals and wants to make the world a better place. Another attribute is rapidly becoming clear: Millennials, having seen the devastating effects of recession, are apt to be extra careful with their money. In addition, the assets of this group are growing.

$2 trillion in assets and growing

According to Forbes, millennials control roughly $2 trillion in liquid assets, a number that could grow to $7 trillion by the end of the decade. Having witnessed what a recession can do to assets, millennials want to play it safe with investing. UBS recently released a survey that found millennials are the most fiscally conservative generation since the Great Depression, The Street reported. In a statement, Emily Pachuta, head of investor insights at UBS Wealth Management Americas, said that the financial crisis has deeply affected the way millennials approach fund management.

“They have a Depression-era mindset largely because they experienced market volatility and job security issues very early in their careers, or watched their parents experience them, and it has had a significant impact on their attitudes and behaviors,” Pachuta said.

However, this doesn’t mean they’re not investing. Many young people see careful investment as an important part of preparing for the future. In fact, according to Forbes, many millennials are already saving for their retirement in their early 20s.

Millennial investors are smart – and they demand digital

The key way to target millennials looking to invest is to meet them on their territories. Traditional finance is alienating to this group. Instead, many startups have started encouraging millennials to invest by using mobile apps and other tech-savvy platforms. These investors are smart. They want to diversify, but they don’t want to put their lives on hold while they figure out an investment strategy. They would rather work on investment throughout the day, Forbes noted. Turning investment management into a game or user-friendly interface makes it easier for millennials to jump on board. If picking stocks is more like clicking iPhone icons, the whole process is more approachable to this group.

Many of these companies combine computer-generated algorithms with human asset managers to provide the most trustworthy investment advice possible. They allocate money into low-cost index ETFs based on modern portfolio theory. One great example of such a company is LearnVest, started by Alexa Von Tobel. The company aims to make financial investment easy and accessible to everyone, with millennials at the forefront of its target market.

Under LearnVest, clients sign up for a monthly fee and are given a combination of computer-generated advice and ideas from human financial planners. The company provides each user with a dashboard that portrays all accounts and demonstrates progress. Customers also receive alerts from the dashboard and rewards for success.

Companies like LearnVest are popping up consistently. Forbes cited data from CB Insights, which found that more than $1 billion has been invested in tech-related personal financial services companies over the past three years. As millennials gain more wealth and grow more comfortable with investing, bigger asset management firms are going to need to find a way to keep up with these tech-savvy startups. One way some firms are accomplishing this is to embrace content marketing initiatives and rich media aimed at specific groups. Mint, the personal finance company, has a popular blog aimed at young people, which encourages readers to share its posts on social media.

When it comes to marketing to millennials, there’s more than one way to reach this group. The bottom line, however, is that your strategy must align with their cautious approach to investing and desire to do it on their own time.

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Emilie Totten

Emilie is Chief Marketing Officer at Synthesis. She brings over 15 years of integrated sales and marketing experience working with financial services, SaaS, and health and wellness companies. Her passion is architecting holistic marketing strategies that align with each business function to achieve client experience, employee advocacy, and revenue goals. When she isn't marketing, you can find her rehabbing her home in the Chicago suburbs, practicing yoga, or spending time with her family.

August 11, 2014

Emilie Totten

Investment Marketing