In this picture taken on December 5, 2017 Jia Xinru browses her smartphone in her office lounge in Beijing. (NICOLAS ASFOURI/AFP/Getty Images)
As financial services firms increasingly adopt social media to communicate with customers and investors, they worry about regulatory challenges. Firms must capture and retain business records wherever they occur, including social media. Firms must ensure their communications with the public are truthful and disclose risk, even with space constraints. Financial advisors must avoid making specific financial recommendations on social media to avoid giving advice that doesn’t meet the investing criteria of all their followers. Regulators have provided guidance and firms are learning and adapting. But perhaps the biggest challenge isn’t regulatory at all, but rather, appreciating and understanding how to use tools like social media to effectively to engage the next generation of investors, the Millennials.
To learn more about how firms should be thinking about this essential group (or rather “groups), I recently spoke with Jeremy K. Balkin. Balkin is an expert in the engagement of Millennials in the financial services sector and author of Millennialization of Everything: How to Win When Millennials Rule the World. I met Balkin while speaking on a panel at an event. Here is some of our conversation that occurred since then…
Joanna Belbey: What do you mean by the “Millennialization of Everything”?
Jeremy Balkin: “Millennialization of Everything” is the term I created to describe the evolutionary process of how Millennials and their choices, preferences and behaviors have disrupted and transformed every major industry, for everyone, and everything.
Belbey: Why are Millennials important to financial services? How are they different?
Balkin: Millennials became the largest living generation in the U.S. in 2015 and currently comprise roughly one-third of the population but only about one-sixth of the wealth. By 2020, Millennials will account for 40% of eligible voters and by 2025, 75% of the workforce. Millennials are a force to be reckoned with and will reach peak economic, cultural, social and political influence over the next decade. Understanding the nuances that differentiate Millennials from other generations is critical, but knowing how to separate the noise and “fake news” surrounding Millennials is equally important.
Belbey: Are there different types of Millennials?
Balkin: There are three distinct subsets of Millennials: older, middle and younger. Older Millennials were born in the early 1980’s and knew what life was like before a mobile phone and Internet. They grew up using an encyclopedia and fax machine and they were graduating high school about the time of 9/11. Middle Millennials were born in the late 1980’s and grew up using the Internet. They were also more likely to lose their jobs, or see their friends and family lose their jobs, during the 2008 financial crisis forcing them to go back to school and take on student loans that have delayed their normal economic behaviors by a decade. Younger Millennials were born in the late 1990’s and essentially only know a mobile-first, hyper-connected Internet-powered and on-demand world. They were also too young to be directly impacted by 9/11 and the financial crisis, the two formative trust experiences that shaped their elder Millennial cohort. When firms think about communicating with Millennials, understanding where they fit within their segment is important. Ideally your firm should have three distinct millennial marketing and communications strategies, but be sure to have at least one.
