9th November 2017

Why you need to be Extraordinary

Infoxication is the word used to describe the difficulty of understanding an issue or making a decision when faced with too much information. My inbox at the moment is certainly infoxicated around the issue of ‘Robo Advice’. It seems every news update leads with some story for or against the issue.

The latest article which seems to have stimulated a lot of debate are the views of one of the industry giants who have now announced that they are developing a digital service in preparation for a future where they see the vast majority of advice in the UK being delivered online, with face-to-face playing a 'back up' role. 

Is this a response to shrinking margins, social change or as some would advocate a combination of both and more importantly a reaction to the rise of the millennials?

Much has been said and studied about the millennials those born between 1981 and 1997.  Again at risk of Infoxication I think it’s important to learn the key points from these reams of research.

Millennials have a radically different approach to financial services from their parents. They look at their wealth differently and financial services is having to adapt. Trust in financial services providers is not a virtue of this generation. Less than half of millennials asked see themselves with the same financial adviser or bank in five years’ time. More than half would happily move now if a better offer came along!

One characteristic of millennials which makes them so attractive to the developers of robo advice is that they are comfortable and indeed actively seeking financial advice from their social networks and from social media.

91% of affluent millennials would use a social network to obtain opinions or commentary about financial markets or events. Also, 81% of affluent millennials say they would turn to a social network for reviews from current customers about financial products and services.

The tipping point for robo advice comes when research shows one in five affluent millennials believes that, in the future, social networks will be the hub of all their financial information.

Now this is certainly attractive to existing providers of financial advice and products but a danger lurks that needs to be considered.

Millennials have been heavily marketed to since birth. They have developed a high level of distrust of overt marketing but also an attachment and loyalty to the brands that promote and share their values. This loyalty best illustrated by the Apple acolytes is a threat to traditional financial services especially robo advice.

This is because research also shows that over 50% of affluent millennials would consider trying financial services and advice from brands they trust that are not yet involved in providing financial services. Brands that have the capital, the marketing expertise, technology, trust and social reach to enter the robo advice market if they see this as an opportunity, and some certainly will!

So what can an adviser firm do to prepare for the future?

Well some will say I don’t have to bother as I won’t be in the business in ten years’ time. However, if your business is here for the long term then a plan for robo advice and to deal with millennials is essential.

The opportunity lies in embracing the use of social media to engage with millennials and promote and provide financial advice which can lead to a closer face to face engagement for more complex issues.

Again, at risk of extreme Infoxication research has shown that 52% of affluent millennials would seek information from financial companies on a social network, and 59% would seek information for personal finance and investment decisions on a social network.

And 89% of affluent millennials would seek thought leadership content about financial markets on a social network.

Relationships with millennials are about ensuring your business has a social media element which can be used to engage, inform and educate.

One way to do that is through business blogging ideally using video the preferred medium for millennials. They have moved on from google. They value engagement, they seek debate and they watch rather than read.

They seek answers not through websites but through Social media and YouTube videos from debate formers and thought leaders.

How well does your business use social media, business blogging and video blogs and how do you position yourself as a thought leader in your field?

Success will take a new approach to marketing and social media and the businesses that address this now can ensure they are fit for the future and ready for the millennial clients of the next decade and beyond.

The clever businesses of the future will offer a blended approach of robo and face to face advice as their proposition. Because to paraphrase the American writer Elbert Hubbard:

“One machine can do the work of 50 ordinary people but no machine can do the work of one extraordinary person”.

The secret of success in the future and with millennials is how do you make your business extraordinary?

John Joe McGinley Glassagh Consulting November 2017

Business Development, John Joe McGinley, Glassagh Consulting