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Look to robo advisors to see where clients will be next

Want to know where clients will be next?

Look to the robo advisors.

Micro investing companies boast about the education that they offer to millennials as a key factor in their success, but experts wonder how this marketing strategy will sustain growth.

Acorns, which has a mobile-first investment platform, has a team of journalists, with backgrounds from CNBC and Forbes, to generate content for its Grow Magazine, while Stash, which also offers a mobile application, uses Twitter to post content from its blog.

“Social media, for us, is a lot about spreading our education and literacy. Social media has been a fabulous place for our customers to learn,” says Brandon Krieg, the co-founder and chief executive of Stash in New York.

Both firms focus on everything from explaining exchange-traded-funds to why General Electric slashed thousands of jobs. But why would micro investing firms need to write about stocks and job cuts?

“If your content marketing to growth-hack your company, you’re gonna try to show up in as many searches as possible,” says Lex Sokolin, a global director of fintech strategy and a partner at Autonomous Research in New York.

The same goes for wealth managers.

Tim Chubb, chief investment officer at Univest of Souderton, Pennsylvania, says the firm wants to get in front of client the best way they can.

But what may work for a baby boomer client, may not work for a millennial one.

“Interacting with these people socially is becoming more important to stay in front of them,” Chubb says. “Communicating a little more online to build relationships with these people who you are not seeing once a month like an old-school advisor.”

It is all about access for the client and prospective ones.

Dan Sondhelm, chief executive of Sondhelm Partners in Alexandria, Virginia, which provides marketing and public relations services to financial services companies, says that content marketing is one strategy to find prospects.

“They want to get the content read by people you don't know about you, putting the content in third-party publications. That’s where your prospects spend your time,” Sondhelm says.

He suggests that while both large and small companies are spending more money on content marketing, email automation is starting to become popular with firms as well, and he thinks that more will take this cost-effective financial literacy path.

Email automation moves away from the simple eblast that sends out one article to all the same clients and instead sends content related to their interests.

“People are seeing that sales and marketing do go together and it’s not that expensive but it is a lot of work,” Sondhelm says. “It’s a cost-effective way to … stay in front of thousands of people, if you have a team monitoring this process and they can pick up the phone and get in touch with the people always engaging with your content.”

Stash says it will have 1.275 million user accounts by the end of the year, while Acorns has more than 2 million.

“My reaction is that these companies have succeeded where the traditional robos are failing,” Sokolin says. “These companies have reached out to their demographics and made finance much more approachable.”

Financial education and literacy are important to making these companies work, Sokolin says.

Not only have these firms made financing “less scary” for younger investors by having no account minimums, they have designed their products to be more like other successful mobile technology apps.

“They’re designing it so people like experiencing it,” Sokolin says. “In terms of financial educational as the reason for their growth, it’s really just simple content marketing.”

Sokolin uses Mint.com as an example from 2007.

The company grew because of content marketing, and at the time, websites were then what mobile apps are now, he says.

“A mobile app is supposed to have things to do, have endless scroll, if can have content change all the time and it gives people a reason to check into the app,” Sokolin says.

However, he suggests that the mobile app demand will soon be old news.

“Websites were an intermediate stop; it wasn't enough,” Sokolin says. “The next stop was mobile apps, and soon mobile apps won't be enough.”

Sokolin thinks that the next stop on the financial technology train is financial services chatbots integrated into messaging services.

The services have to be created in a chat stream, rather than having only a stand-alone app, he says, adding that users can pay other others through Apple and Facebook.

TD Ameritrade is one of the first larger firms to integrate chatbots into Facebook messenger, and Sokolin says this is the start of the newest trend.

This story is part of a 30-30 series on how technology is changing your practice.

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