How to engage the next generation of investors

The stereotypes you’ve heard about Gen-Z are true. They’ve never known life without a smartphone and will spend about six years of their life on social media. But there’s more to the under 25s than we give them credit for, especially when it comes to their finances.

Data shows that Gen-Z are more engaged with financial matters than we think and could become the wealthiest generation. According to a 2020 Bank of America report, Gen Z’s economic clout is the fastest growing among the generational groups and their income is expected to rise fivefold by 2030 to $33 trillion as they join the workplace, accounting for more than a quarter of global income and surpassing Millennials’ income by 2031.

Gen-Z are also taking proactive steps to build their wealth, with a higher percentage of Gen Z’ers beginning to invest compared to Millennials. That might well have something to do with TikTok, where the hashtag #investing racked up over 3.3bn views last year. 54% of Gen-Z hold some kind of investment, with many following investment advice from social media.

What an opportunity for professional financial advisers that are ready to engage with them.

However, as I discussed on Iress’ podcast, most financial advisers aren’t ready and the biggest hurdle will be understanding the younger generation's different values, behaviours and emotions.

VIEW ALL

View all

So how can financial advisers find a connection with the next generation of investors?

Lean in to social media

Gen-Z are your next big thing, so if you haven’t already, it’s time to lean in. For the past decade or longer, most people in financial services have been dealing with the retiring baby boomer population but that time is sadly coming to an end. We’ve got to look down the generations and think, where are the next opportunities? Where are the next client segments? And we’ve got to start looking now.

You shouldn’t have to look too far to find them as they’re all on social media. So what’s my advice to help you get on it too? There’s no magic formula. You’ve got to look for inspiration from others within and outside the sector. Pick one form of content creation like podcasting or video, and get really comfortable with it. See what works for you and what resonates with your audience.

I think video is the best way to start because it's such a good, engaging medium. It allows people to get a feel for who you are and hopefully get to know, like and trust you. And it's much easier these days to make video content. You can literally have a Zoom conversation, record it, and edit those clips together to make a video. You don't need lots of fancy kit. You can record it with your smartphone and go from there.

Nervous? Don’t worry, so was I when I first started blogging over 20 years ago (and I’ve since made over 600 episodes of my own podcast). Don’t be fearful of it; you will get it wrong, but that’s ok. When I listen back to my earlier content, it’s terrible. But only by doing that earlier, terrible content do I improve and hone my skills over time. The more you do, the easier it gets. You’ve got to start somewhere, and the best time to start is now because you can’t go back in time and start then.

If you’re going to do social media, do it right. It can't just be a case of, well, we'll do it once, and if it doesn't get immediate results, we’ll say it didn't work and that it's not for us. It's got to be consistent. It's got to be creative, it's got to speak in that right tone of voice - and it's got to be multi-platform. You can't just pick one social media platform channel like Instagram and think that's enough to be future-proof.

You should be spending almost a day a week on this stuff, if not more. Carve out some time every week. You've got to say, okay, this part of my day I'll spend on social media, this part on client work, this part on business development, etc. When you’ve been doing it consistently for a year, three years, five years, you’re going to start to grow that audience and see results from it.

Creating the right content

To be ready for this next generation, you’ve got to understand what they’re interested in, what drives them, what turns them on. Don’t ape or copy what’s going on in other social media trends. There’s a real risk to that. You’ve got to be authentic; you’ve got to be yourself. Don’t try to project an image that isn’t the real you. Authentic content resonates best with any viewer and any listener on social media.

When it comes to content creation, my advice is to be really clear about your target audience before you make your content, so you are creating content that speaks directly to them.

And how do you keep fueling the social media machine? That’s the easy part. One approach I take with my content creation is newsjacking, so I look at what's happening in the world and provide some commentary around it. There's always stuff to talk about. That's the lovely thing about the world of money and life. You can listen to the news over breakfast and come up with three to five different bits of content.

Invariably, when somebody discovers you’re a financial adviser, they'll ask you a question about money. It's a bit like if you're a doctor and people ask you about ailments. Listen to the questions your clients, friends and family ask, make a note of them and create pieces of content that answer the questions. It's a really effective approach because if somebody types that question into search and your content is the best answer to that question, that’s what Google or YouTube will present to them, and that’s how you get discovered.

Embrace it

While the fear factor might have held financial advisers back from fully embracing social media, the recent crackdown on so-called ‘finfluencers’ from regulators presents advisers with an opportunity to use social media for the right reasons. Financial advisers have a wonderful opportunity to embrace social media and content marketing, but do it to genuinely educate, inform an audience and help people make better financial decisions.

Martin Bamford is director of client education at Informed Choice Independent Financial Planners.