As of July 2019, Millennials (ages 23 to 38), numbered 72.1 million, and Baby Boomers (born between 1946 and 1964) numbered 71.6 million. Millennials are the largest adult demographic in the United States and are about to become the wealthiest. Within the next 25 years, Millenials will inherit approximately $68 trillion from Baby Boomers.
The battle for the hearts, minds, and wallets of Millennials has already begun in earnest.
The online reputation of financial services companies will influence how and where Millennials will invest their money in the coming years. Millennials were raised on the Internet, and have a comfortability with online banking, securities trading, and insurance and demand 24/7 availability of account information and related services.
97% of Millennials read online reviews before selecting a business, and 89% trust those reviews. In a business that historically relied on multi-generational relationship banking and word-of-mouth referrals and recommendations, today’s customers demand outstanding service and are fiercely independent.
According to a recent study by Deloitte, 75% of millennials would switch their private bank if they found a better option.
Millennials are more likely to look online before asking their own parents for advice when making investment decisions — including the decision of choosing a financial advisor.
Fifty-nine percent of people consider online reviews when choosing a professional service provider. Nearly three-quarters (71 percent) of Millennials consult consumer reviews of professional services, along with nearly half (49 percent) of Baby Boomers.
When choosing a financial advisor, clients can look to BrokerCheck, an online tool developed by FINRA, an independent, non-governmental regulator for all securities firms doing business with the public in the United States, that shares the employment history, certifications, licenses, and any violations for brokers and investment advisors.
BrokerSearch is another valuable tool with an online database of publicly available information about criminal, regulatory, civil judicial, or customer complaint events that involve a broker or investment adviser.
Investor.com has developed a proprietary Trust algorithm that considers years of experience, conflicts of interest, and disciplinary history in deciding whether to recommend a broker or investment advisor.
Google My Business, Better Business Bureau (BBB), TrustPilot, ConsumerAffairs, MyBankTracker, and FourSquare are also highly visible sites for consumers to learn more and read reviews about banks, insurance companies, brokers and financial advisors.
Reputation Rhino and other reputation management companies offer customized Review Monitoring, Review Reporting, Review Outreach & Review Response services for financial services companies.
Social media is a complex area for financial services companies which must balance legal and regulatory oversight, including books and records maintenance, supervision, suitability and sometimes complex compliance requirements regarding fair and balanced communications that can sometimes make it very difficult for firms and individuals to effectively leverage social media for new business development and client relations.
The rules and regulations concerning social media promulgated by the Securities and Exchange Commission (SEC), FINRA, the Federal Trade Commission (FTC), as well as state and local authorities have evolved and expanded over time. Now, most financial services companies have a presence on Facebook, LinkedIn, and Twitter. Also, most individual registered representatives and investment advisers have a LinkedIn profile and some social media presence.
Firms and their registered representatives must retain records of communications related to their “business as such.” The recordkeeping requirement is based on the content of the communication not the technology used to receive or send the communication, and today there are a number of tools used for monitoring and recordkeeping firm and employee communications, including social media posts.
Firms must have the ability to supervise business-related content and some social media communications require supervisory approval, while others are subject to the same standards as email or other correspondence.
Customer complaints, investment recommendations, and investment advice pose unique challenges to compliance and risk management. Even sharing research reports and popular media stories about specific investments on social media can create unique supervisory issues for regulated firms.
One thing is clear, clients and customers are on social media, and financial services companies must also be present to educate, engage, and excite this audience.
More than one-third of respondents (35 percent) rate a bank’s reputation as one of the three most important things about their bank. Since the financial crisis of 2008-2009, financial services companies have been working overtime to win back the trust and confidence of the public. Reputation management has never been important.
Reputation Rhino is led by an extraordinary team of experienced legal, marketing, technology, and public relations experts and we have worked closely with financial services companies, including private equity firms, hedge funds, financial planners and advisors, merchant banks, and M&A firms on actionable online reputation management strategies to:
Reputation management for banks and broker-dealers involves the promotion of positive media coverage and online reviews. This builds brand awareness and reputation for merchant banks, hedge funds, financial advisors, financial planners, private equity firms, and M&A firms. This type of reputation management requires legal, tech, PR, and marketing expertise. It is crucial for banks and broker-dealers if they wish to gain the trust of the public — especially those investors who remember the 2008-2009 financial crisis.
Individual financial institutions can improve their own reputations while improving the reputation of the entire banking industry. Negativity can be combatted with positive reviews solicited from satisfied banking customers. A financial institution should respond to all reviews—negative and positive—with gratitude and a willingness to help. They can also work with influencers, build relationships using social media, implement content marketing, and run advertising to counter negative press.
By 2022, it is forecast that more than ¾ of Millennials will engage in digital banking. That is significant, considering that Millennials are currently the largest adult group in the U.S., and stand to inherit $68 trillion within the next quarter-century. This age group is more reliant upon online reviews than any other. That makes online reputation management for financial services companies more important than ever, going forward.