Young Americans are poised to inherit and grow significant wealth.
But when it comes to meeting them where they are – notably, on various digital feeds where they tend to take in financial advice via video – financial advisors aren’t on the same page.
Many advisors may not feel comfortable – or have the compliance blessing – to participate on these platforms. But that doesn’t mean they should ignore them entirely.
Instead, they can take away lessons from the youth-driven digital advice landscape and hone their marketing strategy to envelope this emerging client base.
Here’s what advisors should know about how young folks are growing wealthy, where they’re turning for financial advice and how advisors can connect with them.
If you are looking to grow your financial advisory business, check out SmartAsset’s SmartAdvisor platform.
Burgeoning Wealth Among the Young
Millennials and Generation Zers saw their financial accounts grow significantly in 2021, according to Cerulli Associates. Their wealth grew from $2.9 trillion to $3.6 trillion, the most of any generational cohort.
For these young folks, wealth comes from sources such as investing in their retirement accounts and experimenting with brokerage accounts. They also stand to inherit significant wealth from older generations.
In fact, 63% of all wealth transfers through 2045 will be from households in the baby boomer generation. Much of that money will trickle down to their children’s and grandchildren’s generations – millennials and Gen Zers.
Sources of Financial Advice
But with all this money funneling – or poised to funnel – into young folks’ accounts, these fresh-faced investors aren’t exactly stampeding to financial advisors and traditional advice sources for guidance.
Instead, 34% of Gen Z consumers obtain financial advice from TikTok and 33% get it from YouTube, while only 24% of this age group seek advice from financial advisors, according to marketing company Vericast.
When it comes to Millennials, 13% get advice on TikTok. Another 22% head to YouTube, and 26% seek out advice from professionals.
Advisor Social Media Strategies
Generally, financial advisors aren’t flocking to the platforms favored by young folks.
In a recent SmartAsset survey on marketing trends, advisors listed Instagram and TikTok as the least-used social media platforms. Approximately 82% and 97% of financial advisors say that they never use Instagram and TikTok, respectively.
More than seven in 10 financial advisors say that they never use YouTube and Twitter. Instead, advisors prefer LinkedIn and Facebook, platforms often associated with older and more established users.
So what gives? Advisors may not be able to participate on every platform from a technology, content or compliance standpoint. But that doesn’t mean they can’t take away lessons from this shift to digital video financial advice and improve their marketing strategies based on those trends.
SmartAsset spoke with Kerri Feazell, video strategist at Authentic Advisor Video, and Samantha Russell, chief evangelist at FMG Suite, to determine what advisors should know.
Should Advisors Use TikTok?
Short answer: It depends.
Advisors don’t need to be on TikTok if that’s not where their base spends its time, experts say.
But even if they’re not on the platform, advisors must still understand up-and-coming and Gen-Z-facing sites such as TikTok. “While I don’t think advisors need to be actively using TikTok to succeed – and most cannot use it, in fact, because most compliance departments will not allow it still – it is worthwhile to understand why it is so popular and growing so fast,” Russell says.
One significant reason: Video has an impact that other media doesn’t. “When someone sees your face and hears your voice on video – it helps build that connection and rapport that you don’t get from written communications,” Russell says.
3 Ways Advisors Can Improve Social Media and Video Marketing
1. “Lights, camera, actionable advice.”
It’s time to brush up on your movie-making skills, even if becoming a TikTok influencer is not your goal, Feazall says.
“If your goals are closer to using a video strategy to establish trust with potential clients, retain clients and gain referrals by educating existing clients and/or attract new advisor talent to grow your firm, those are excellent business reasons to invest in a video strategy,” she says.
Advisors may choose to embed videos in emails or newsletters. They can also upload them to YouTube. (One additional benefit of YouTube is that it can improve your ranking in search results.)
2. Find your niche. “On any platform, reaching a ‘younger audience’ is not specific enough,” Feazall says. “If you want your video to be seen by anyone ages 25 to 35, that’s much less powerful than targeting a very specific niche, which is the power of using platforms that collect a lot of data about their users.”
She recommends getting as specific as possible about your customer, then targeting that group with video ad content.
3. Check with compliance. You know the drill. “Always check in with your compliance guidelines before creating video and throughout the process,” Feazall says.
Disclosures and some other requirements may be added to videos after filming. But you don’t want to find out that you’ve inadvertently filmed something verboten once it’s in postproduction.
“Most advisors are still not allowed to use TikTok,” Russell says. But if you are a registered investment advisor (RIA) that self-manages compliance, she adds, “the good news is that the videos that perform best stay far away from any investment advice and stick to basic budgeting and personal finance tips.”
Tips for Growing Your Financial Advisory Business
Let us be your organic growth partner. If you are looking to grow your financial advisory business, check out SmartAsset’s SmartAdvisor platform. We match certified financial advisors with right-fit clients across the U.S.
Expand your radius. SmartAsset’s recent survey shows that many advisors expect to continue meeting with clients remotely following COVID-19. Consider broadening your search and working with investors who are more comfortable with holding virtual meetings or spacing out in-person meetings.
Photo credit: ©iStock.com/wagnerokasaki, ©iStock.com/izusek
The post Millennials, Gen Zers Are Gaining Wealth, But Advisors Aren’t Meeting Them Where They Are appeared first on SmartAsset Blog.
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