Why Financial Institutions are Failing to Court the Millennial Generation
The solution to the struggle that financial companies have in courting millennials won’t be a product. It won’t be some huge innovation in financial services or app design. It won’t even be stricter government regulation enacted to gain back the trust of the public. All the new application overhauls in user interface and features like mobile deposit and biometric security are fantastic, but they’re just band-aids that show us companies are still scratching their heads at what they should be doing. So before they find out, they’ll throw millions of dollars at the wall and hope that something sticks. That by making their tools easier for people to use — it’ll be enough. But that’s the thing. You can’t sell a product purely on convenience (unless that is the product). You sell a product on what it does, and if the value it adds is enough, people will buy it no matter how cumbersome it is.
Instead, the real reason behind the lack of interest in financial services is a lack of education in practical financial knowledge. With the incredible expansion of financial tools within the past few decades as well as the crash caused by the 2008 Lehman shock, there’s been built a feeling of exclusivity and distrust surrounding the entire industry — discouraging many from learning even about its basics. And this, the lack of learning and knowledge about financial services is the key reason in the decline.
Of course, financial professionals don’t expect their clients to have the same amount of in-depth knowledge — if they did, they wouldn’t need their services — but there’s an implicit assumption that there is a shared base of foundational knowledge and worldview. Financial advisors don’t expect their clients to know about the Long Strangle or Iron Condor they’ll use to hedge client portfolios, but they’ll assume that their clients will at least know how calls and puts work and share a priority towards value stability over liquidity.