3 lessons independent advisors can learn from Acorns®

September 20, 2016 by Andy Penkalski

about the author:

Andy Penkalski

Director, marketing

Andy oversees the breadth of go-to-market initiatives for Advicent, including product marketing, lead generation, public relations, and partner learning and development. He is interested in always discovering new tools for brands and businesses to more effectively reach their audience and improve metrics for success within their own organization.

When it comes to protecting segments of your AUM from being pick-pocketed by a robo-advisor, the Millennial-targeted Acorns® app is not about to make any serious land grabs on your current book of business.

Targeting Millenials to grow your business

The "roundup" investment app has, however, been making sobering gains on your future clients. The two-year-old startup, which funds user investments by rounding up their debit and/or credit charges to the nearest dollar, had close to one million accounts – 75 percent of which belonged to users between the ages of 18 and 34 – when they received their latest stage of funding in April.

So, at a time when FINRA statistics point to a customer-base that is almost entirely over the age of 30 and industry trades regularly paint Millennials as either detached from or jaded toward their finances, what is allowing Acorns® and similar apps (like the more-robust Robinhood) to target young investors so successfully?

What can advisors learn from investment apps like Acorns®?

In all likelihood, much of what contributes to the success of Acorns® frames their business into less of a competitor and more so a primer for future, more robust financial planning experiences. The Acorns® investment platform is low risk, highly fixed in its portfolio customization, and potentially fee-heavy for the younger audience it targets.

On the contrary, Robinhood offers a much more robust experience; however, it is at a cost that can still feel prohibitive to younger advisors. Clearly, these startups are not beating CFPs and RIAs at quality of service. They are, however, engaging their prospects and clients in the digital spaces where they spend the overwhelming amount of their time. Here is how they're doing it.

1. Offer responsive experiences

When is the last time you tried to access your firm's website via phone or tablet? Is the experience customized for those devices, or is it an identical desktop version that demands endless pinching and swiping to navigate?

While smaller firms may not have a realistic need to get their digital experience available for download as a phone app, a responsive mobile website is essential to the modern prospect experience. Over fifty percent of web traffic in 2015 came from mobile devices, and our marketing department can say from experience that this high watermark for mobile engagement is not unique to consumer goods and content.

Your prospects are doing product research at work, during their daily commute, and from their couch. In 2016, catering exclusively to a PC user experience is no longer enough.

2. Brand-wise, less is more

Not unlike the responsive user experience that Acorns® offers, the app's streamlined approach to holistic brand identity and storytelling also engages younger clients by removing inhibitions and educational barriers to financial advice. The horizontal-swipe interface of their mobile onboarding experience, which is imitated on their desktop site, is explained in five simple steps that are bolstered by streamlined art, which assists in telling the Acorns® story without distracting from it.

Obviously, Acorns® is a bare-bones investment experience compared to what a dedicated advisor can offer, but it demonstrates how to succeed with the next generation of investors by describing the value you are provided them in the least daunting way possible.

3. Do not give them time to change their mind

It takes about as long to perform an internet search for a handful of local advisors as it does to be registered and invested in Acorns® or Robinhood. By allowing users to quickly aggregate the accounts they would like to use in support of their investments, these services encourage registration via drastically reduced opportunity costs that are typically associated with participating in traditional investment channels.

What is most notable about these points of success is how independent advisors are not priced out of any of these competitive tactics. Modern responsive web design has long been affordable and scalable for smaller businesses via services like Squarespace®.

Client portal experiences are also becoming standardized relationship components for clients and advisors at a time where everyone is enabled to communicate anywhere at any time. Your future clients are looking for a certain brand of user experience, and the tools exist for every advisor to create that experience.

Click here to learn more about the industry-leading financial technology solutions offered by Advicent, or call (855) 885-7526 to speak with an Advicent representative.

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