Viral social media app TikTok isn’t just for teens showcasing trendy dance routines or influencers sharing the latest meme stock, but a content tool used by traditional institutions looking to remain relevant while funneling clientele into the digital investing platforms they’re building.
That’s what Fidelity Investments Co. is betting on after officially launching its very own TikTok account. The giant fund manager posted its first TikTok video at the end of June and has since published five videos ranging from how-to guides for using their Fidelity Spire app to explainers of financial terminology with food visuals.
Financial education and advice blew up on social media largely as a result of the pandemic-fueled lockdowns spurring more young people than ever before to engage in their personal finances. Forty-one percent of these young investors — largely Generation Z, referring generally to the generation that was born between roughly 1997 and 2012 — turn to social media influencers to educate themselves on investing, according to Fidelity.
“We know it’s important to meet our customers where they are, and for our younger customers — we know many of them are on TikTok, Instagram, Reddit and other digital platforms,” said a Fidelity spokesperson in an email. “This is a generation seeking out financial content and there are more than 23 billion views on TikTok videos with the #money hashtag. We are joining the money conversations where they are happening.”
When a large traditional institution, like Fidelity, invests in catering to next-gen, it’s a sign that the industry is taking notice of the young media-savvy type of investor that is poised to inherit $68 trillion in the greatest generational wealth transfer over the coming years.
The focus on traditional ultra-high-net-worth clients typically steered advisory firms away from social media and younger investors, but that wealth transfer represents an opportunity for advisory firms to open their doors to a wider breadth of potential clients. What advisers should also note is that these generations are going to keep getting their advice from online influencers, according to a new TIAA Digital Engagement survey.
The survey found that one in five people cite social media content as a go-to resource for financial information and one-third say they trust social media content to help them make financial decisions. Further, 32% say they trust social media influencers and celebrities for financial advice. The findings suggest that as the country emerges financially from the pandemic, the financial advice industry will need to reconsider how they’re engaging different generations across platforms, according to TIAA.
Fidelity has some work to do to keep up with influencers already dominating social media. Fidelity sports 383 followers so far, a drop in the bucket compared with financial influencers like former Merrill Lynch financial adviser turned content creator, Humphrey Yang, who’s known as @humphreytalks with 2.3 million followers.
However, Fidelity is taking a page from these influencers’ playbook by fueling money conversations on TikTok and even catering content to Instagram that’s focused on quick and witty financial education. Fidelity’s following clocks in at 30,700 followers on Instagram.
By comparison, competitors Charles Schwab & Co. has 22,400 followers, BlackRock Inc. has 36,000 and UBS Group caters content to 83,700 followers. However, Fidelity is one of the only brokerages on TikTok, according to searches on the platform.
Entering the TikTok game isn’t the first time Fidelity has made moves to appeal to the next-gen investor. The incumbent hosted its first Reddit ‘Ask Me Anything’ in February on the heels of the GameStop Corp. stock surge to engage with customers and answer live questions regarding retail trading.
More than 1,300 comments from Redditors flooded the discussion, yet trading education was largely outshined by comments comparing Fidelity’s mobile app interface to Robinhood. Fidelity said it has since taken advantage of the feedback on Reddit and has been transparent about changes to the Fidelity Mobile app based on their suggestions, said the Fidelity spokesperson.
In May, the firm launched Fidelity Youth Account, the platform where teens are able to trade U.S.-listed stocks, Fidelity mutual funds and most exchange-traded funds, with no account fees or commissions.
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