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

Key Considerations for Effective Financial Education Programs

Banks and other financial providers have recently increased their focus on developing financial education programs, driven by a number of factors:

Numerous studies have highlighted deficiencies in financial literacy among U.S. consumers.  FINRA Foundation’s National Financial Capability Study found that only 37% of people were considered to have high financial literacy in 2015, down from 42% in 2009 and 39% in 2012.  Studies also show that consumer exposure to and engagement with financial education programs leads to smarter financial decision making.  Therefore, the onus is on a range of entities (government, educational institutions, nonprofit organizations, industry associations, and of course financial firms) to develop programs to improve financial literacy.

Many financial firms are looking to (re)position themselves as trusted providers of not just products and services, but also of information and advice that can help people better manage their finances.  To that end, financial education programs can act as a means to help banks cement relationships with their clients.

The following are some key considerations for financial firms in establishing a new financial education program—or in enhancing an existing one:

  • Conduct research to gain insights into consumers’ financial literacy levels, attitudes to financial services, preferred channels for consuming financial information, and favored sources of financial information and advice.
  • Create a dedicated and branded financial literacy program that brings together the diverse range of financial education initiatives under one umbrella.  These programs can take the form of an online portal, such as the TD Bank Learning Center, John Hancock Retirement Plan Services’ My Learning Center and MassMutual’s FutureSmart program.
  • Conduct financial education surveys.  Surveys are an effective way to raise consumer awareness and interest, highlight commitment to raising financial literacy, and gain insights that inform financial education program development and execution.  U.S. Bank recently published two financial education surveys: the Parent Financial Education Survey (July 2016, focused on the parents of college students aged 18-14) and the Student and Personal Financial Survey (September 2016).  Last month, Bank of America published the Bank of America/USA Today Better Money Habits report, which was versioned for 7 of its markets.
  • Ensure that financial education content reflects the different ways that consumers process information.  Keep content short, with easy-to-follow tips and soundbytes.  Incorporate images, infographics or video to enhance its visual appeal.
  • Distribute content through a range of channels.  These channels can include online portals (as described above), events, in-person and online courses, and social media platforms. (PNC announced in August that it would be using Pinterest to promote its financial and early childhood education initiative.)  In addition, a number of banks (e.g., First Tennessee, First National Bank and SunTrust) have partnered with Operation Hope to open HOPE Inside offices in its branches.  SunTrust recently announced an ambitious plan to expand the Operation HOPE Inside program from 7 branches today to 200 by 2020.  The number of individuals receiving financial counseling through these offices is expected to rise from 6,000 to 150,000.
  • Partner with schools and nonprofit organizations that promote financial literacy in communities.  This partnership can take the form of joint programs, funding or employee volunteer hours. Fifth Third recently introduced an initiative to deliver its Empower U financial literacy course through 60 local nonprofit organizations throughout its footprint.  And Allianz Life recently awarded $275,000 in financial literacy grants to 14 nonprofit organizations in the Twin Cities.

Well-constructed, well-delivered financial education programs improve financial literacy.  This in turn leads to smarter financial decision making, benefitting both consumers and their financial providers.