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.

Will we still wear lanyards? Addressing the challenge of B2B financial services events during social isolation

Thousands of people flying in from all over the country. Hotels filled to capacity. People packed shoulder-to-shoulder in an enclosed room. Handshakes and exchanges of business cards. Buffet dinners.

Almost everything about conferences seems foreign in our current reality. Indeed, most fall conferences have already announced that they will not take place in-person. Some have been postponed, some cancelled, many turned virtual. In a few cases, such as some recent investor conferences and a Forrester conference, the switch to remote has been seen as a success. In most cases, however, the decision to waive registration fees betrays a lack of confidence on the part of both sponsors and attendees about a virtual event’s ability to deliver value. But, you say, registrations and log-ins have increased as no travel expenses, no missed work and no registration fee lowered the decision bar almost to the floor. The problem: Any quantitative improvement likely masks a significant qualitative drop in engagement.

If we take a step back and think realistically about how conferences provide value, the situation becomes clear: Conferences create an opportunity for sponsors to get concentrated exposure to and interactions with their prospects; attendees get a break from their daily routine with the valid justification of an immersive opportunity to learn from experts and peers. Move the conference to the web and all those things disappear. Indeed, a virtualized conference in the form of a series of presentations becomes almost indistinguishable from a thematically-connected series of webinars.

As the threat of COVID stretches into the foreseeable future, it’s incumbent on all parties involved—the conference organizers, the sponsors and the prospective attendees—to think creatively about how to fashion virtual events into something that takes advantage of the positives and mitigates the negatives. Nothing about greater registration volume and potentially greater expert participation for a virtual event inherently leads to lower attendee engagement and fewer sales prospect interactions. In fact, it’s potentially quite the opposite. The first step down a path of creating valuable virtual events is to identify and isolate the key components of live events that people find valuable:

  • For sponsors: The value comes from getting their name and capabilities in front of their target audience and being able to engage with them directly to generate sales opportunities.
  • For attendees: The value comes from the opportunity to learn from industry experts and their peers, as well as the potential to find solutions to their business challenges.

Having identified these elements of value, the question then becomes: How can we create this value virtually, irrespective of the way it was generated in live events? The answers should produce a framework that would be more productive than putting two days’ worth of presentation sessions on the internet and offering virtual networking lounges that will never be used. Here are some of our ideas.

Generate marketing and sales value for sponsors:

  • Sponsored structured virtual chats and roundtables that create opportunities for peers to discuss topics of high relevance and interest to them, moderated by sponsor representatives
  • Sponsored virtual group icebreaker activities to help forge connections between peers from similar businesses and/or geographies
  • Tinder-style (“swipe right”, “swipe left”) sponsor pitches for 1:1 meetings to enable attendees to choose the sponsors with whom they want to interact, thus ensuring higher-quality conversations

Generate learning value for attendees:

  • A greater number of shorter sessions, spread over more days, because nobody will sit through multiple 45-minute online presentations
  • Asynchronous Q&A spanning the entire duration of the conference so that attendees have an opportunity to reflect on content, discuss it with teammates, and then pose questions
  • Multiple instances of live sessions to increase the options for attendees to join (thereby also increasing exposure for sponsors and presenters)
  • Small, structured breakouts to create substantive opportunities for attendees to learn from each other

We believe that these ideas serve as a good starting point and also enable a wide variety of iterations, depending on the specific sponsors and attendees and topics. They represent a sincere effort to do more than bide time until the business world “returns to normal” because at this point, it’s doubtful that anyone can accurately predict when that will really occur.