It’s imperative that Financial Services stops underestimating the importance of the Millennial generation

17 Aug, 2021

In the first of a three part series Libertine London Business Partner, Will Wright explains why the investment industry urgently needs to start engaging with this age group, before the opportunity is gone.

Part 1. The opportunity

Traditionally in financial services marketing, particularly in investments, younger age groups have been relatively ignored. The argument we have heard time and time again is that they don’t have enough assets to make them worthwhile. It is a good argument and a difficult one to disagree with. In the past it was possible to simply pick them up as they reached a more useful age of around 50. However, for a wide number of reasons, we believe that there is a unique generation coming through for whom this approach won’t work. This being 30 – 40 year-olds.

Historically the major brands relied on inherent trust in financial services businesses built up over generations. These previous generations opened a bank account at their parents’ bank and never moved it. The major players in the space have a reputation built up over years of other advertising, such as life and general insurance, and the rest could be scooped up with print advertising in the weekend qualities. 30-40 year-olds entered the world of work through the eye of the financial crisis and have known nothing but austerity ever since. They don’t consume traditional media; they were the digital revolution, they remember getting internet for the first time and were probably the ones who set it up in their homes. Their attitude to financial brands is completely different, and this is demonstrated in our research which shows major household names in the sector lagging by around 20% on awareness amongst this age group vs the older generations. That doesn’t look like a slight age disparity to us, it looks like a major brand problem in the making.

But it’s not all doom and gloom, we believe this group also offers some really compelling opportunities. First and foremost this generation are already highly engaged in the sector. The growth on platforms such as Hargreaves and AJ Bell amongst this group is well documented. This growth was driven by the pandemic but it is something that brands could capitalise on in the long term. Our research has also shown us that they are active, they are much more prepared to move their money around. Admittedly there has been some experimentation in the riskier end of investing, but as the world returns to normal they may well want to carry on investing but with a more hands off and long term approach. Again an opportunity. Lastly, they are likely to be the main beneficiaries of the Great Wealth Transfer as the accumulated wealth of the richest age group jumps down to their children. On top of this, as one of the people we spoke to about this pointed out, with the younger age group having to look after their parents they may become the guardians of this money even sooner.

Our research also suggests this group are desperate for brands to step up. They are far more concerned about investing with a well-known brand, with 15+% more of them identifying “well-known brand” as the most important concern vs. other age groups. And they are in desperate need of guidance, over indexing on their reliance on advice, professional or otherwise. But there is also a more prosaic reason that they make a lot of sense as an audience to target. Their values match with a lot of the changes being forced upon businesses already, through regulation and societal pressure. More of that in the next of our features that looks at the unique challenges this audience presents

Here at Libertine London we’re on a mission to re-think the way Financial Services communicate. Because it’s an industry that’s too important to society to be done badly.