Staying Relevant: 5 Lessons from Millennial Investing Apps

Love or hate them, millennial-focused investing solutions aren’t going away any time soon. Startups offering robo-advisory and automated microinvestment solutions (mostly in the form of mobile apps) have acquired swaths of customers with small account sizes. While some of these startups, like Acorns, have targeted users with little money to spare, others, like Hedgeable, have targeted HENRYs (high earners, not rich yet.) All of them are betting their customers will remain loyal when they actually become rich. If this happens, these apps have the potential to seriously disrupt incumbent brokerages.

The bare-bones product these startups offer is similar to a low-fee, risk-adjusted target-date fund, something incumbents like Vanguard and Fidelity have offered since the 1990s. While these products are decidedly not-that-innovative from a financial engineering standpoint, the true achievements of these startups are their mobile-friendly UX design, beginner-friendly onboarding processes, and customer service that caters to their young users’ preferred communication channels.

We compared the mobile offerings of the top incumbent brokers with those of the millennial-focused startups. For the full findings, see the spreadsheets.

Millennial Broker Mobile Product Comparison

Incumbent Broker Mobile Product Comparison

For a quicker view, here are the top five takeaways for how to attract young customers, who might be poor today, but strive to be rich in 20 years.

Don’t Scare The Rookies

Most new investors don’t yet know what they’re doing. When they download an incumbent broker’s app, they get bombarded with promotions for advanced charting tools, stock screeners, options trading, analyst ratings, and more. They might find these features handy someday, but right now they don’t even know what they’re used for. By pushing these advanced trading products, incumbent brokers scare off potential customers by convincing them they aren’t ready to invest yet.

Sell them success, not technical tools.

iPhone 6 _ 4.7 inch _ SilverWhen new investors download a millennial-focused investing app, they are greeted with a sleek interface and a gentle introduction into how the product works, with no technical charts or numbers in sight. Instead of selling them access to complicated, stress-inducing tools for self-directed investors, millennial-focused apps sell potential customers the hand-holding necessary to get on the path to achieve that success.

Visuals > words.

Millennials communicate with images, videos, emojis, GIFs etc: essentially everything except written words. They are more likely to engage with your product when you tell them a story through visuals. They don’t want to read an email telling them to set monthly contributions. However, if they see an interactive graph of the potential returns they could generate, they may actually contribute.

Don’t make them call

1i65YBa7While their parents prefer to pick up the phone, millennials prefer to connect with brands on social media, messaging platforms, and through mobile apps. If you force them to call, talk to a robot, and wait through elevator music for customer service, you’re already doing it wrong. And if you don’t actively engage with your existing and potential customers in their preferred digital spaces, you shouldn’t expect to win their loyalty.

Tweet like their friends, not their grandparents

Once you’ve penetrated your customers’ favorite digital spaces, content always trumps promotion. Millennials are notoriously averse to blatant product-pushing tactics, and much more receptive to content-based marketing. In our survey of incumbent vs startup brokers, startup’s tweets gained 200X the engagements per follower, with jokes, rhymes, and other tweets that only broadly relate to their products.

Ads are annoying, but content drives sales.

Many incumbents, on the other hand, are still tweeting thinly-veiled invitations to open an account or check out their latest stock screening tools. To build loyalty with young people, incumbents should cut the try-hard tactics and create great content. When you make your audience giggle at a tweet, or gasp at a blog post, you create true, lasting value through social media. Otherwise, you’re just another ad to scroll past.

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