5 Investment Marketing Trends in 3Q21

Like other financial sectors, the investment and wealth management sector is dealing with changes in investor preferences and needs, as well as technological advances that impact how firms interact with both investors and their financial advisors. The following are 5 key marketing trends that we observed in 3Q21 as the industry seeks to respond to these changes.

  1. Introducing new digital tools to both investors and financial advisors. As investors become more comfortable with managing their financial needs through digital channels and tools, investment firms are improving the client experience and using these digital tools to serve as a point of differentiation.
    • Investor tools: Schwab Retirement Plan Services launched My Financial Guide, an interactive, online dashboard; Jackson introduced an enhanced Retirement Expense & Income calculator
    • Advisor tools: John Hancock reported that it has engaged with more than 1,500 financial advisors on the ON24 Digital Engagement Platform, which enabled partners to grow new business by 266%; Bank of America Merrill Lynch launched the MAX (mobile advisor experience) app to get advisors back in the field
  2. Using surveys to demonstrate that younger investors are committed to working with financial advisors, even as they embrace digital investment tools.
    • T. Rowe Price’s Retirement Savings and Spending Survey: 43% of retirees receive advice from a financial professional
    • New York Life’s Wealth Watch Survey: 61% of Millennials and 50% of Gen Zers (vs. 41% of all respondents) are interested in receiving help from a financial professional
    • Broadridge: 61% of Millennials (vs. 44% of all investors) are likely to begin working with a financial professional over the next two years
    • Schwab Retirement Plan Services: 62% of Gen Zers say their financial situation warrants advice from a professional
  3. Looking to position themselves in the ESG investments space via thought leadership, commitments and other initiatives as a result of growing awareness of and interest in ESG.
    • Publishing ESG/sustainability reports to establish their own ESG credentials
    • Making financial commitments: New York Life announced a $50 million investment to support the preservation of affordable housing rental properties, and Northwestern Mutual announced a $100 million impact investing fund
    • Developing ESG-focused content, including articles and blog posts, as well as incorporating ESG into investor surveys: according to an Accenture survey, 80% of Gen Z and 63% of Millennials asked their advisor about ESG investments vs. only 27% of Baby Boomers
  4. Incorporating financial wellness elements into retirement solutions – an increasingly important theme in financial planning – as well as promoting financial education in thought leadership.
  5. Rebranding and launching new advertising campaign to reposition themselves in a changing investment market.
    • MassMutual introduced the “Uncomfortable Truths” brand platform and a multichannel brand advertising campaign
    • Prudential launched the “Who’s Your Rock?” campaign, which used its famous rock image for the first time in a decade
    • Protective Life rolled out a new brand identity and logo
    • PNC Asset Management rebranded its personal wealth businesses as PNC Private Bank, with Hawthorn rebranded as PNC Private Bank Hawthorn

If You Give An Advisor a New Business Model: Changes in Fee Structure Require Other Changes As Well

In a well-known children’s book called If You Give a Mouse a Cookie, a boy’s initial decision to give a mouse a cookie sets off a domino effect of one new requirement after another. It’s a great story about unintended consequences and the need to take responsibility for them.

The story is a useful lens through which to view the early momentum for moving away from an AUM-based fee to a recurring fee. Three recent articles highlighted this shift: two addressing discussions at LPL Focus (one from Financial Advisor and one from Wealthmanagement.com) and one sharing the results of a survey.

Without a doubt, recurring fees – and the steady revenue they produce – can be an attractive business model. Just ask Netflix or Salesforce. The appeal may be even greater if you’re an advisor whose primary alternative is a model in which you make less money when the market dives while you’re working even harder to satisfy clients who are unhappy with their portfolio losses.

But here’s the catch: You can’t shift to a recurring, subscription-like fee and still do the same things as before. Why? Because charging a monthly fee and delivering tangible value only two or four times a year means you’ll likely end up with unhappy and angry clients. Two totally unintended consequences.

If you decide to make the shift to a recurring fee, you also need to change two key elements: value delivery and measurement of client satisfaction:

Value Delivery. It’s entirely reasonable for a person who pays a fee every month to expect to realize value for that fee on a monthly basis. If Netflix didn’t spend millions of dollars on content and instead only offered old movies, you would cancel your subscription. If you could never get to the gym because you didn’t have time or there was a pandemic, you’d cancel your membership. Advisors have always had to face the question of “what am I getting for my money and is it worth it?” Under a recurring fees system, it’s even more important that the answer to that question is “yes”. Advisors need to ensure that they are explicitly delivering value to their clients on a regular, ongoing basis.

Client Satisfaction. If an advisor charges a fee based on AUM, it’s reasonable to assume that the client’s satisfaction will be driven by the growth of his/her portfolio. Shifting away from this fee model requires also moving away from the assumption about satisfaction. Portfolio performance will undoubtedly always be a piece of the equation when it comes to assessing the health of client relationships, but under a recurring fee model with ongoing value delivery, it can’t be the only piece. Client relationship health will increasingly be based on the frequency and quality of communications, the accessibility and easy use of technology tools, and the availability of ad hoc support and guidance.

The bottom line: People pay and assess satisfaction based on the value they receive. If advisors who shift to a recurring fee don’t acknowledge this reality of human nature, they will undoubtably face the unintended consequences of losing clients and referrals.

Five Strategies for Turning a Virtual “Oh Well” Event into a Success

Almost six months into our new reality of social distancing and virtual everything, we are now seeing articles, including a recent one from Wealth Management , wondering whether in-person conferences are dead. This speculation is fueled by questions about when it will be safe to mingle inside with hundreds of other people and by a growing recognition that virtual conferences – when executed creatively and thoughtfully – not only can have advantages over in-person but that there are ways to mitigate the disadvantages. The key, as we discussed in a previous post, is to think about virtual not as a “better-than-nothing” substitute, but as a viable alternative.

In this vein, we have developed a list of the key components for developing a strong virtual conference strategy that can help sponsors and speakers to maximize their value:

  • Get intimate. To a great extent, conference experiences are defined by physical limitations of space: 50 breakout sessions with 5 people in each or 100 one-on-one private discussion sessions would be very difficult to manage. But, within reason, you can in a virtual environment. Speakers can break an hour-long session into three 20-minute sessions each serving a smaller, more homogenous audience. Speakers and sponsors can also set up and promote virtual office hours for private discussions.
  • Short and sweet. Combat the disengagement effects of distractions and lack of physical proximity by making the presenting part of sessions shorter and the Q&A longer. Leverage the polling and “hand raise” features of most virtual meeting platforms to solicit and field comments and feedback to better engage the audience. (Pro tip: If you’re a speaker, make sure you have some “friendly” attendees who will get the interaction started with questions in case other attendees are hesitant.)
  • No limits. In a virtual world, time and space are no longer a barrier to engagement. Sponsors should powerfully leverage more senior management, who only need to make themselves available for short periods rather than committing to days of travel and attendance. Speakers are also likely to obtain greater participation from a broader range of partners and panelists who don’t have to weigh the benefits against the days out of the office.
  • The Journey not just The Destination. With live conferences, there’s a tendency to under-leverage the pre- and post-conference opportunity because you know that the time spent together in (fill in hotel in Florida here) will be what makes the event worthwhile. Sponsors can work to make up for the loss of that capstone opportunity by making better use of the pre- through post-conference communications to engage and spur conversation. Pre-conference, ask attendees what they want to get out of the conference and develop a connection to a sales resource. During the conference, use social media to initiate conversations. Post-conference, ask what they found valuable and send out related content.
  • Value-added on-demand. One of the best things about virtual conferences is that everything can be recorded and shared afterwards. Sponsors can use that as an opportunity not only to broaden the reach of their content, but also to further engage with their customers. Consider offering commentary and curated lists of sessions/topics that would be of interest, both to customers who registered/attended and even those that did not.

The bottom line is that many 2021 conferences have already announced as virtual. For B2B companies, the investment in these events is too great to just cross our fingers and hope that things return to normal soon. Necessity is the mother of invention: It’s time to develop approaches that make the most of our “new normal”.