It is now well known that billions of pounds are set to change hands in the ‘big wealth transfer’ which is to take place across the next few decades.
This means that client retention and attraction strategies will take centre stage to not only secure current clients’ offspring but also attract younger cohorts too. The financial advice and wealth industry is facing, probably for the first time ever, a great pressure to keep up with ever-increasing digital needs of younger groups.
From 24/7 accessibility, to digital and easy to digest communication, there are an array of challenges facing firms, but a key one for IFAs is maintaining a strong and engaging social media presence.
It may seem obvious to many, but there are still several advice and wealth firms that do not have any social media accounts – and that includes LinkedIn – something that could actually work against them in the medium to long term.
While some firms are clearly behind the social media game, others are trying to keep ahead with bite-sized content accessible to anyone at any stage of their financial lives.
For instance, last year BlackRock ventured onto TikTok, now the biggest platform in the mix, to share informative quick video clips to educate users on the basics of investing.
As a result, International Adviser reached out to industry to ask what role should social media have in advice company’s retention and attraction strategies, and whether TikTok could be the solution going forward to tap into the next generation of clients.
Think of the audience
Adam Riddell, director at Crystal PR, said: “It’s easy to see the appeal of exploring TikTok as part of any social media strategy – it grew 255% last year and has been the third most downloaded app for the past three years running. It’s also attractive because there’s a definite appetite amongst finance firms generally to diversify their content online, and video is attractive for that reason.
“But the big driver is audience – reaching younger people, the ‘nextgen’ is a massive part of the strategies of most finance firms. For that reason, there’s no doubt that finance firms are exploring TikTok more. It’s seen as a platform for self-education more and more – and that works well in breaking down complex issues like cryptocurrencies, personal finance, and economics into short, digestible chunks of video.”
But Riddell warns against jumping on bandwagons and trends for the sake of doing it as a firm’s online presence should still reflect its mission and objectives.
“Key is to ensure doing so fits in with the tone of voice and strategy you want to pursue in the market. If it jars or doesn’t feel genuine, it will likely backfire. As with any social media strategy, it’s worth taking the time to think it through and work out how it’s going to work and what you want to achieve before signing up.
“Ultimately, if a strategy is about building understanding, familiarity and recognition amongst a specific audience, then it’s the same for financial services as it is for other sectors. You’re still connecting and engaging with people, that’s what relationships are all about.”
Russell Andrews, global head of advice solutions at SEI Asset Management Distribution, said that TikTok has the potential for brands and firms to reach groups of people that may not normally be aware or even come across them.
“Financial services can sometimes carry a certain stigma. Using a platform such as TikTok can potentially go a long way in establishing a relatable brand and culture with those who might feel disenfranchised or alienated from an industry seen as not applicable to a younger generation of investors.
“To be successful in delivering content through a channel such as TikTok, it is critical that financial services organisations seek expertise that can foster a different set of mental models to content and communications, otherwise the value could become quickly diluted.
“More and more, consumers are becoming sensitive to the values and behaviours of the companies they choose to do business with, and TikTok could be seen as a valuable asset in providing a new audience with a simple, digestible, and fun message about their cultural credentials.”
Jo Meerveld, head of social at Orchard PR, echoed Andrews’ sentiment as she believes younger generations have a “natural mistrust for big institutions”.
This means that financial advisers “need to meet them where they are and on their terms if they want to win over that market”.
“Popular topics for this group include saving money, investing early, and paying off student loans and there are plenty of ‘finfluencers’ who are talking their language.”
If they don’t make sure their outreach closely matches what younger generations want from financial services, advisers could be losing valuable clients to social media influencers who more closely align with the way young people like to digest content and their preferred media of consumptions.