Using social media to close the Gen Z financial literacy gap

Kerry Ryan CPWA®, Director of Financial Services Industry Strategy & Solutions Marketing at Seismic 

 

Gen Z is the first digitally native generation, having grown up surrounded by social media, mobile devices, and the internet. As such, they spend more time online than other generations: 54% of Gen Zers use social media at least four hours daily. For comparison, only 20% of older adults spend this much time on social media.

With 66% of Gen Zers saying social media is essential to their daily lives, financial services firms must take note and meet this demographic where they’re at. Social media is no longer just a tool for pushing out ads and branded content – it’s an avenue for starting authentic conversations and building relationships. Finserv firms should thus identify means to elevate the role of social media in their marketing organizations. We can’t run from it anymore.

This is especially true given that Gen Zers are projected to inherit upwards of $84 trillion by 2045, which means financial advisors who are able to engage with this cohort before the competition will be poised to win. Developing an early strategy for attracting Gen Z clients is therefore imperative, and social media will prove a key channel for reaching this audience.

The process of using social media activity and engagement as a central part of prospect and client communication is called social selling or digital client engagement, and it’s particularly effective when looking to attract digital natives.

Let’s explore the need for financial education among Gen Z and steps finserv firms can take to close the financial literacy gap.

Financial literacy woes 

Gen Z has quite the learning curve when it comes to personal finance. Eighty-four percent of Gen Z rely on family members for financial information, which can be problematic – their parents and grandparents grew up in different economic conditions and may provide them with outdated information. Earlier generations also had less sophisticated options related to savings, retirement, mortgages, and loans. They may not be aware of the new technologies, services, and regulations that exist.

Gen Zers need access to relevant information they can apply to their everyday lives, and they’re turning to social media to find it: Gen Zers are nearly five times more likely to seek financial advice on social media than older generations. That means this channel is ripe with opportunities for education and appealing to younger prospects.

Sharing content that promotes foundational financial knowledge goes a long way. A video breaking down the ins and outs of first-time homeownership or a series of posts on various account options will be incredibly useful to readers and establish the advisor and their firm as a source of credible financial advice.

Social engagement for financial services firms 

Whether you’re specifically hoping to attract more Gen Z clients or simply wish to modernize your client acquisition process, social media is a must. Here are six steps you can take to create compelling, engaging, and compliant social media content:

  1. Define your strategy: If your firm is new to social engagement, you’ll need as much insight from your client-facing teams about content, formats, and preferred channels as possible to tailor your approach accordingly. If you’ve tried your hand at social selling but have yet to see any big wins, look at the data available for your existing efforts. Analyze your performance to identify what’s working, what isn’t, and any areas for improvement.

  2. Outline roles and responsibilities: Social media should not fall on the shoulders of a single employee or department – it should be a shared responsibility between all client-facing teams. Establish shared expectations, KPIs, and ground rules from the get-go to ensure alignment.

  3. Align with compliance and legal: Finserv is a heavily regulated industry, and new mandates like the latest SEC Marketing Rule are cropping up all the time. This means your organization needs risk management tools, processes, and platforms in place to ensure your social media strategy is in line with current regulations. But compliance shouldn’t be the scapegoat for avoiding social media altogether; there are plenty of tools and technology that can align with any firm’s compliance standards.

  4. Share best practices: Client-facing teams, particularly those involved in your social engagement efforts, should regularly share tips and best practices for crafting standout social media posts. Keeping tabs on what messaging, post length, and type of post resonates best with your desired audience can optimize your strategy in real time.

  5. Leverage third-party content: Don’t just share content from your firm – a variety of corporate and third-party materials is best. This will demonstrate to your audience that you’ve done your research and are committed to helping them conduct their own. Pointing people in the direction of helpful resources will simultaneously further the goal of closing the financial literacy gap and build your authority as a reliable source.

  6. Give employees the proper tools: Company leaders should look for tools that make utilizing social media seamless and efficient for their employees. With a social selling platform in place, firms can automate content creation, enable authentic and personalized posting, ensure compliance, and effectively and accurately measure engagement.

Personalization is everything 

Personalizing the content your firm authors and/or shares on social media is an absolute must, as the voice used and information included will vary from audience to audience. To achieve the goals of a successful social media program, firms must showcase their expertise, deepen client engagement, and advance their client acquisition efforts.

As such, client-facing professionals like advisers, bankers, agents, and relationship managers need access to tools that help them customize and distribute the best possible content. Recent data revealed that 63% of global employees in a revenue-related role believe the content they use is not personalizable enough for their customers. Offering more personalization and customization capabilities for social media that address regulatory requirements is a must have for every financial services institution.

To excel at social media, firms must equip their employees with the proper technology. This will ensure content shared to social media is always personalized, compliant with the latest regulations, and, above all, in service of promoting financial literacy.

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