In Vino Veritas

Retail Investment Vehicles Seeking Millennials Need to Follow another Booming Industry’s Example

Water & Wall Group Mark LaVoie Gainey Vineyard Santa Barbara

My friend Sofia and I visiting Gainey Vineyard outside Santa Barbara

This month, I went on my second wine tour in a year. As was the case for my first trip, the majority of those on my outing were below the age of 35. Wine is booming, with the U.S. overtaking France as the largest wine market for the first time ever, thanks in part to millennials’ obsession. Even the phrase, “in vino veritas,” is making a comeback after more than a century of vernacular obscurity.

I’ve spoken with a few of my friends about why they love wine. In my very scientific poll, I was told the following:

1) Wine is healthy
2) Wine is sophisticated, yet accessible
3) Wine is transparent – you know what you’re getting

How is this connected to the realm of finance and communications? Let’s start with the misguided assumption that millennials are short-term thinkers.

On the surface, this might seem true. After all, many millennials are unemployed or living paycheck to paycheck. But consider Goldman Sachs’ recent study concluding that millennials are increasingly active, eating smarter and smoking less. Is that evidence of a short-term mentality?


Enjoying wine inside Gainey Vineyard’s tasting room

Although they’re in debt and have less disposable income, millennials are mindful of their future. A 2014 Wells Fargo study is even more specific, concluding that a third of millennials believe they won’t be able to rely on Social Security for their future. Not only that, but 53% of millennials think about their financial future daily, 13% more than their boomer counterparts.

So what can retail investing vehicles borrow from the wine industry to bolster marketing efforts?

Tout the benefits of investing early and regularly – If a millennial is avidly watching their waist line, he or she should be just as concerned about the bottom line of their 401k and other investments. The benefits of a glass of red wine a day may not be realized until retirement. The same goes for that saved $50 a month. Continue to push this long-term financial health message, but over the channels that millennials are using — Twitter, Facebook and LinkedIn. Demonstrate the need to invest without lecturing, showing why your product is the healthiest choice. With this messaging, millennials may enter your ‘wine club’ for life.

Offer accessible sophistication – Nothing is worse at a dinner party than someone bringing over a bottle of Chateau Diana from Walgreens. It’s barely wine and tastes awful; too focused on image rather than quality. For both wine and investing, marketers need to show a savvy, quality product, and a price tag that’s reasonable. Some millennials may want the sophisticated firm that’s been around for hundreds of years and others may want the innovative firm that’s been producing some great risk returns. Either way, earn their admiration by showing true value, not a list or game designed as momentary clickbait.

Explain where the money is going – If the internet and social media has prioritized anything, it’s been transparency. What’s nice about a bottle of wine is that it tells you where it comes from, what year it’s from, and what’s inside. Right off the bat, you can make an educated decision about whether this is a wine worth buying. Investments should work the same way. Despite a fancy title, vehicles like the “Prosperity Fund” are not exactly telling of what an investor is getting into (and the SEC has taken notice – “SEC Adopts Rule Prohibiting Misleading Mutual Fund Names.”) The title should be descriptive and a fund summary should explain the types of investments happening inside. Millennials want to know where their money is going. Just like they don’t want to put garbage in their bodies, they don’t want to invest in it either.