The Millennial Opportunity: Marketing Financial Services to the Digital Generation

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This presentation is based on research from our recent whitepaper – The Millennial Opportunity: Marketing Financial Services to the Digital Generation. The whitepaper focuses on the Millennial Generation - or Gen Y - and how financial firms communicates to and about members of this generation.

Inside, we take a high-level look at the key findings from the whitepaper and three case studies from industry leading firms. The slide deck concludes with a set of recommendations for helping your firm market to Gen Y.

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The Millennial Opportunity: Marketing Financial Services to the Digital Generation

  1. 1. This is my title
  2. 2. © 2013 Corporate Insight, Inc. The Millennial Opportunity: Marketing Financial Services to the Digital Generation www.corporateinsight.com Follow us on Twitter @CInsight The Millennial Generation – or Gen Y – grew up during the dot-com bust, the era of the “99%,” and the Great Recession. They’ve also come of age when the annual cost of a public four year college has doubled, and housing prices have more than tripled on average1 . These economic conditions will influence the generation’s interactions with the financial services industry throughout their adult lives. At their best, financial firms can build a partnership with Millennials to help grow their wealth over time. However, these firms risk being known as just a bill collector or, worse, a villain. Corporate Insight is beginning to look across our coverage groups to monitor how the industry communicates to and about members of Gen Y, and we hope to build a library of these materials over time. Our cross-industry perspective allows us to explore how the industry positions its full breadth of products for young people, including investments, retirement, insurance, banking, credit cards and more. In this whitepaper, we review some of the first few attempts that industry firms are making to market to Millennials – advisor resources from MetLife and MFS and a public site page from The Hartford. We describe their materials and key themes, and provide our ideas about where they succeed and fall short. This report concludes with a few key takeaways for firms to consider as they potentially develop their own outreach efforts. Inside… CASE STUDIES ..........................................................................................................................1 MetLife: Profiling Gen Y............................................................................................................................1 MFS: Surveys and Strategies.....................................................................................................................2 The Hartford: Millennials in the Workplace .............................................................................................3 KEY TAKEAWAYS FOR FINANCIAL SERVICES FIRMS ..........................................................................4 MFS Stands Out.........................................................................................................................................4 Future of Millennial Marketing.................................................................................................................5 Three Tips for Financial Services Firms.....................................................................................................5 ABOUT CORPORATE INSIGHT ......................................................................................................6 CONNECT WITH CORPORATE INSIGHT ..........................................................................................7 1 http://money.usnews.com/money/personal-finance/articles/2007/12/12/the-new-parent-trap
  3. 3. 1 © 2013 Corporate Insight, Inc. The Millennial Opportunity: Marketing Financial Services to the Digital Generation www.corporateinsight.com Follow us on Twitter @CInsight Case Studies MetLife: Profiling Gen Y MetLife tries to familiarize advisors with potential clients through a series of demographic profiles developed by the Mature Market Institute, including one on Gen Y. The six-page profile highlights important statistics in easy-to-read charts and graphics alongside qualitative descriptions drawn from research articles. For instance, the firm notes that “Gen Yers, or the ‘Millennials,’ were as a generation most coddled by their parents,” and “Children were rewarded simply for participation, and everyone was considered a ‘winner.’” At the same time, the hard data on Millennials portrays them as tech-savvy and highly-educated, with growing spending power as they move from their 20’s and into their 30’s. MetLife Demographic Profile In addition to statistics and commentary, the firm also provides a timeline of significant historic, social and cultural events that have helped shape the generation, from the 1990’s to today. This handy, concise guide can further help advisors understand and connect with younger prospects. Gen Y Timeline
  4. 4. 2 © 2013 Corporate Insight, Inc. The Millennial Opportunity: Marketing Financial Services to the Digital Generation www.corporateinsight.com Follow us on Twitter @CInsight MFS: Surveys and Strategies MFS uses a wealth of survey and interview data to build helpful advisor sales resources. Its advisor site Sales Tools section includes both an Investing Sentiment Survey page as well as a more detailed 20-page e-book entitled Getting the Digital Generation to “Like” the Market. These offerings combine general data with individual case studies to prepare advisors for the opportunity the generation represents. MFS combines Generations X and Y in order to present the most compelling case – that their combined population and spending power outweigh that of the Baby Boomers. In addition to the statistics, MFS provides interactive resources like videos of young investors telling their stories, slickly embedded into the e-book as well as the webpage. The e-book is the more comprehensive offering, providing actionable advice about presenting investing options in an empathetic and effective manner. MFS Video MFS refers to the increasing size and value of Generations X and Y as an industry “crossroads” and states, “The best opportunity to grow your business is through Investors in their mid-40s and under.” The e-book reminds investors that younger investors reached investing age around the time of either the dot-com bust or the Great Recession and view market volatility as a reality. It goes on to provide strategies for dealing with a generation that might be risk averse as a whole. It encourages advisors to keep these new clients focused on their long-term goals instead of fearing the market. Repeatedly, MFS promotes the idea that younger investors are the future of an advisor’s practice. The firm is getting out ahead of the marketplace in doing so.
  5. 5. 3 © 2013 Corporate Insight, Inc. The Millennial Opportunity: Marketing Financial Services to the Digital Generation www.corporateinsight.com Follow us on Twitter @CInsight The Hartford: Millennials in the Workplace The Hartford’s main Gen Y-focused resources come from its Group Benefits team, which takes a different perspective than MetLife and MFS’ advisor sales tools. However, it is equally important for benefits providers to understand Millennials, who will eventually dominate the workplace of the future. With that in mind, The Hartford maintains a My Tomorrow page dedicated to generational trends. The page’s main offering is a five-page trend forecast that provides tips for both employees and employers. The trends suggest that Millennials want to customize their job experience, expect workplace technology that will allow them to work from home, and may be more stressed than other generations. The firm also warns of the upcoming “Generational Mashup.” As Baby Boomers remain in the workplace and Millennials enter it and begin to gather wealth, employers and marketers will have to simultaneously appeal to the oldest and youngest Americans. The Hartford’s Benefits Infographic My Tomorrow also includes an infographic about employment benefits that attempts to speak in the parlance of the generation, using phrases like “YOLO” and “Let’s get real.” The employment benefits infographic provides a number of stats about Millennials, like what they would do if they could not work for more than six weeks due to an accident or a serious illness. The data varies in its relevance to the workplace – for example, The Hartford reports that Millennials want to enroll online for benefits, and that Dr. Oz is their favorite celebrity.
  6. 6. 4 © 2013 Corporate Insight, Inc. The Millennial Opportunity: Marketing Financial Services to the Digital Generation www.corporateinsight.com Follow us on Twitter @CInsight Key Takeaways for Financial Services Firms MFS Stands Out All three firms stand out for recognizing a potential market and making an effort at outreach to Gen Y. MFS is ahead of the curve in insisting that advisors think of younger generations as their target market. The firm does a great job of providing strategies for advisors to be empathetic to a generation strapped with debt and potentially skeptical about the financial services industry. It also keeps a positive tone. Getting the Digital Generation to “Like” the Market eBook The Hartford runs a risk of seeming out of touch not only with Millennials but also with older audiences as it attempts to adopt youthful terms such as “YOLO.” This type of generational terminology often has a short shelf life, and while Millennials may peg the firm as out of touch, older audiences may simply not understand and dismiss the message altogether. And although MetLife’s demographic report provides a bevy of useful statistics for advisors, some of the statements make Millennials seem incompetent, and are condescending, at best. Refraining from making generation-wide generalizations and offering strategies on how to reach the new target demographic are best practices for the industry.
  7. 7. 5 © 2013 Corporate Insight, Inc. The Millennial Opportunity: Marketing Financial Services to the Digital Generation www.corporateinsight.com Follow us on Twitter @CInsight Future of Millennial Marketing There is not currently a high volume of available information directly referring to Millennials on our coverage websites at this point. This represents a great opportunity for firms to get out ahead, especially with this very “Digital Generation.” Going forward, we are interested to see how financial services firms begin to market to Gen Y. We hope to see an approach similar to MFS: acknowledging that the youngest generation is a target market to take seriously, comprised of different people with different stories. Gen Y’s unique history gives it a complicated relationship with the financial services industry due to its heavy college debt burden and difficulties during the Great Recession. It will take a patient approach that emphasizes the potential long-term gains investors and savers can achieve through a positive partnership with the industry. Financial services firms must educate their advisors and other representatives for the challenges – and opportunities – the younger generations present. Three Tips for Financial Services Firms #1 Avoid negative characterizations that could lead advisors to pre-judge Gen Y clients. #2 Stats are great, but providing actionable strategies for advisors marketing to Millennials is better. #3 Start marketing to Gen Y now. Establishing a positive relationship with Millennials now should pay dividends over time.
  8. 8. 6 © 2013 Corporate Insight, Inc. The Millennial Opportunity: Marketing Financial Services to the Digital Generation www.corporateinsight.com Follow us on Twitter @CInsight About Corporate Insight Corporate Insight provides competitive intelligence and user experience research to the nation's leading financial institutions. For over 20 years, Corporate Insight has tracked new developments in the financial services industry through our Monitor research services and custom consulting services. We are known for our detailed, objective research, unmatched expertise, and emphasis on the actual user experience. There are no assumptions in Corporate Insight’s work – we use live accounts at the firms we track to benchmark their effectiveness across all major channels and give our clients unparalleled competitive intelligence. Corporate Insight is continuously tracking and identifying best practices in online banking and investing, insurance, annuities, mobile finance, active trading platforms, social media and other emerging areas. In the process, we have helped our clients -- which cover the entire spectrum of financial services -- to stay on top of industry trends and improve their competitive position. Our research and analysts are frequently cited in financial media outlets such as The Wall Street Journal, Barron’s, Bloomberg, CNBC, Forbes and SmartMoney and news publications like the Associated Press, New York Times, Newsweek, TIME and USA Today. MONITOR SERVICES Corporate Insight’s Monitor Research Services continuously track the online and offline user experience offered by leading firms across the financial services industry. Our Monitors include: BANKING & CARDS  Bank Monitor  Credit Card Monitor  Small Business Monitor INSURANCE  Annuity Monitor  Life Insurance Monitor  P&C Insurance Monitor BROKERAGE  Broker Monitor  e-Monitor ASSET MANAGEMENT  Mutual Fund Monitor  Advisor Monitor MOBILE FINANCE  Mobile Monitor WORKPLACE  Retirement Plan Monitor  Stock Plan Services CONSULTING SERVICES Corporate Insight offers a variety of custom consulting solutions including:  Website Audit Services  Web and Mobile User Research  Competitive Benchmarking  Mystery Shops  Merger Integration  Mobile Platform Analysis
  9. 9. 7 “Advisor Monitor” “Annuity Monitor”, “Bank Monitor”, “Broker Monitor”, “Credit Card Monitor”, “E-Monitor”, “Life Insurance Monitor”, “Mobile Monitor”, “Mutual Fund Monitor”, “Property & Casualty Insurance Monitor”, “Retirement Plan Monitor” and “Small Business Card Monitor” are services marks of Corporate Insight, Inc.; all rights reserved. Connect With Corporate Insight ABOUT THE AUTHOR ALEX FILIACI SENIOR ANALYST – BANK MONITOR & CREDIT CARD MONITOR Alex Filiaci is Senior Analyst for Corporate Insight’s Bank, Credit Card, and Small Business Card Monitor research services. He has conducted extensive research on the banking, brokerage and credit card industries, examining the online platforms and technological innovations leading firms offer prospects and clients. Alex has been tracking the tactics and online resources financial services firms use to market to and serve Millennials since the start of 2013, which culminated in “The Millennial Shift,” a syndicated study highlighting industry trends, innovations and best practices for serving Millennial clients. He has been quoted in Investment News, Investor’s Business Daily and Financial Advisor Magazine. Alex graduated from Binghamton University in 2010 and has been a member of the Corporate Insight team since 2011. CONTACT ALEX: T: 212-832-2002 x-128 E: afiliaci@corporateinsight.com MEDIA INQUIRIES Corporate Insight welcomes the opportunity to speak with the media. If you are interested in citing our research or would like to schedule an interview with our analysts, please contact Joshua Grandy, Director of Public Relations at 646-876-7524 or pr@corporateinsight.com. FOLLOW CORPORATE INSIGHT CORPORATE INSIGHT BLOG @CINSIGHT LINKEDIN FACEBOOK SLIDESHARE PRESENTATIONS

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