Episode 2.3 with Stephanie Wolfe

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Text transcript

Kevin Press:  

Welcome to the Canadian Advisor.cast, a podcast dedicated to financial advisors and the people who work with them. My name’s Kevin Press. I’m Editorial Director of Advisor.ca. My guest today is Stephanie Wolfe, Executive Vice-president and Head of Marketing at Global X Investments Canada. In August, Research + Knowledge = Insights surveyed 306 Canadians, each with a minimum $10,000 in investible assets on behalf of Global X. They wanted to understand what investors think about financial influencers, or finfluencers as they’re often called, and how closely they follow them. Seven in 10 consume this content. Almost nine in 10 say they’ve taken at least one action after doing so. A couple of other numbers: 79% have invested at least once based on this content. Among that group, nine in 10 say they’re glad they did. Among those who work with a financial advisor, 81% say this content has changed that relationship. Ninety-four percent of gen Z respondents consume finfluencer content regularly, an average 4.9 times per week. Welcome, Stephanie. What was your motivation to do this study? 

Stephanie Wolfe:  

Hi, Kevin. Well, thank you for having me on this podcast, and thank you for highlighting so many of the key insights that we did get from this research. It was truly fascinating and what actually motivated us was we have noticed, over the last decade, obviously a shift in how Canadians are consuming content in terms of receiving it from, you know, the media and where are they actually going to get information. And social media is there for everybody, and it’s become a mainstream part of our everyday lives. And so we wanted to really see what are Canadians doing when they’re on social media and looking at financial content creators. 

Kevin Press:  

What stood out to you as the key findings? 

Stephanie Wolfe:  

There were a few interesting findings and just to clarify, we actually have broken it out into the four basic demographics. We have gen Z, millennials, gen X, and boomers, and I thought what stood out to me and what was most interesting is that regardless of the age category of who was engaging with this content, all of them were very intentional and they were action-oriented. They weren’t just passively scrolling. So, no matter where they were going for this information, there was action that was taken. 

Kevin Press:  

Why do you think so many Canadians are turning to these influencers? 

Stephanie Wolfe:  

I think that social media provides them an opportunity to engage with content that may be educational, but is also done in bite-size, easily digestible content. So, it’s easier to understand these complex financial concepts, and they can take it and really learn from and take next steps to do further research. New ideas might be presented to them in this social media context that, maybe, they had never understood before as it relates to investing. And, actually what we did find in the research is this provided an avenue for those that were actually working with a financial advisor. Ninety-five percent of them would take this content to speak with their financial advisor to learn more and understand the concept a little better. 

Kevin Press:  

Do you follow any influencers? 

Stephanie Wolfe:  

Yes, actually I do. And, you know, it’s really interesting-and shameless plug, we actually do work with Jon Erlichman, who is a well-known BNN anchor, and he is the host of Ticker Take on YouTube. He is one of my favourites, obviously, but we do, I do actually follow many of them, and we do work with the ones that I think are, perhaps, the most credible and reputable. 

Kevin Press:  

And they’re taking action based on the information they receive. What does that look like? 

Stephanie Wolfe:  

Well, very positive results actually. And, I’m just going to reference my notes here. Nine out of 10 viewers report taking this action after consuming the content: that was increase their savings, adjusting their investment strategies, and planning for retirement. And so, these are all very positive things. And like I said, for those who work with an advisor, 95% of them were more comfortable, you know, speaking to their advisor about it. And 81% of them actually said that it helped them ask better questions so that they can engage a little more with their advisor and have the confidence to do so. 

Kevin Press:  

Your media release talks about a trust gap, which I think is such an important element of this. And when we think about advisors and we think about journalists, there’s a real process around what they provide. Advisors, obviously, have Know Your Client regulations, Know Your Product requirements. There’s legal and compliance review of all marketing materials. And then, journalists are working with multiple sources. They’re engaged in fact-checking. And, of course, that’s just not always happening with these influencers. Does any of this give you pause? 

Stephanie Wolfe:  

Yes, and I would say that-and this is why the importance of the regulators coming in to take a look at this space is so important and to put some framework and guidelines in place. There are definitely bad actors out there. That’s a given. In any industry, I think, they are there. And so, I really think the ongoing clarity and the engagement that we can get from the regulators will really help make this better for everybody, for all stakeholders, as well as Canadians. I would say that, you know, for any company who might be engaging in work like ourselves, for example, in working with content creators, there is a very strict compliance, legal and compliance process that we go through in order to make sure that, that content, you know, adheres to the right industry standards. One thing I’ll say, though-and what came out in the research-is that Canadians are very discerning about that trust, and they are looking for credible content creators. They don’t like to be product-pushed at. They’re very easy at finding things that might be, you know, distasteful or too risky, and they can identify that. And so, we have found that what they really are drawn to is those who really provide high-quality content that is reputable and can be verified or fact-checked from their own financial advisor or from other sources like news and media outlets. 

Kevin Press:  

You mentioned that you’ve broken the results down by age and it’s young Canadians that are most likely to follow these content creators. I hear what you’re saying about they’re being selective, not wanting to see product pushes and so forth, but, aren’t they vulnerable to misinformation or the wrong information, incorrect information just by virtue of their age? 

Stephanie Wolfe:  

Yeah, I would agree with that. I think, and the younger cohorts, right, like I mean, they’ve grown up…they’re digitally native, and their first information sources are often online and that’s just the world that they’ve known. So, you know, I can’t speak to all of them, but they did have the highest number in the stats of consuming financial content, creator content. At the same time, they also found them to be more trustworthy. So, it is something that I think we should keep an eye on, and that’s where I do think, you know, guidance from CIRO can really help, you know, weed out, perhaps, some of the challenges that we might be seeing on these platforms for misinformation. But, I would say that, you know, they, they’re spending a lot of time there, and what’s great is that they are, perhaps, taking an interest in learning about finances at an earlier age, maybe more so than perhaps gen X or boomers. And so, you know, even through the midst of the noise and some of the bad actors that might be out there, I think there is some good-quality content that they can, sort of, take with them and perhaps start instilling some better values when it comes to money, moving forward. 

Kevin Press:  

As you mentioned, CIRO and the Canadian Securities Administrators issued guidance on how existing securities rules apply to financial creators and the firms that work with them. That was just this past December. Do you think the regulators are doing enough? 

Stephanie Wolfe:  

I think they’re taking the right steps, and I do expect them to have further guidelines put in place in the coming future. You know, I think that right now the onus is really on a lot of the companies that might be engaging with the finfluencers, but I think the next step will be to start working and speaking directly to the financial content creators who are in the industry. 

Kevin Press:  

I was struck by the preferences for quick-hit content in your findings, particularly among young consumers. A third of gen Z respondents said they prefer content under one minute in length, and there’s a kind of common sweet spot between two and five minutes. What’s your sense of how much real education is going on here? 

Stephanie Wolfe:  

Yes. Yeah, we saw that as well, and that’s where…there isn’t a whole lot that can be consumed in less than one minute that would be quite educational in nature. So I really do think it is more from an entertainment standpoint, really giving the information in those quick hits to have them, maybe, think a little differently about, you know, investing or saving for retirement, et cetera. But, the longer-form content and information that delves into-even on YouTube or podcast information, et cetera-that goes into more detail is hopefully where they end up, right? Hopefully, they’re not taking action on that less than one minute. And that did apply to the younger cohorts as well. So, I think for them, at this point, it may be more fun and bite-size information that they can just digest and consume right now. And, I think for the different generations, for them, they do prefer the two- to five-minute length and a little bit more context or detail around that, that they can build off of and go and do their own research after that. 

Kevin Press:  

I think a lot of people in the industry are where I am on this, which is really conflicted. I asked Rob Carrick about this, who made the point, very much like yourself, that, listen, there are some great people doing this content, and, that’s a positive. No one’s questioning that. The lack of rigour around this, though, gives a lot of us real pause. And, I wonder, what’s the conversation happening there? So you’re a good example of a fairly progressive organization, from a marketing perspective at least, and, you’re obviously thinking carefully about how you go into this space. What’s that conversation like? 

Stephanie Wolfe:  

Well, I think one of the things that we’ve taken away is that we know that this is…what I would like to say, first of all, is that I think that advisors play a role in this as well. I think that they came out heads and shoulders as the number one trusted source. I think it was something like 87% of those who are consuming this content think that financial advisors are actually the trusted source of information. So, I would lead with that. And I would say that I think that what we’re seeing is social platforms are becoming a primary source of news for these younger adults. So it’s not something that I think we can ignore, but I think that we have to adapt and grow with as these younger generations start to mature in the next decade or so. You know, I think social media is going to continue to evolve and it will take on a different form in some way, but I think we need to just monitor and stay close to it. You know, I still think there’s a lot of value-and that came out in our research-around traditional media sources being very credible for this information. So it is something that, you know, I think is, it’s changing and evolving, and this is where I think the regulators play a really important part in shaping how this future is going to look. And, you know, it’s important that we see Canadians continuing to be interested and just get, you know, very discerning and collect some of this content from social, but there does need to be, you know, strict guidelines around this as we move forward. 

Kevin Press:  

Yeah, and look, we’re not going to get the genie back in the bottle, right? 

Stephanie Wolfe:  

Right. 

Kevin Press:  

This is something that exists and so we need to figure it out. So let’s talk about the advisor perspective on this. How should they be talking to clients? 

Stephanie Wolfe:  

Well, I think they should actually be watching finfluencers themselves. I think it’s a good tool, especially for those that have, you know, generational clients. Perhaps it is an avenue for them to open doors to speak to the younger clients that they might have and they’re looking to retain. And so I think it’s just, you know, obviously, taking it with a grain of salt. I don’t think advisors should feel any pressure to show up on social media platforms and, you know, perhaps host their own YouTube channels or Instagrams. But, at the same time, I think it’s important that they’re just aware and are, you know, engaged and having these conversations with their clients and just being aware of what’s out there. 

Kevin Press:  

And I think a lot of advisors have the opportunity to get into this space themselves. As a marketing executive, what advice do you think they should be taking from this movement? 

Stephanie Wolfe:  

Well, I think that what we’ve seen is, obviously, easily accessible, is perhaps the number one thing. This is what they’re looking for is quick, easy, digestible content. And that’s what makes social media so interesting and why people are tuning into it. It really does empower people, which I think they just, they didn’t have before. You know, it’s a different way of consuming financial content, which I think has traditionally been thought of as being difficult to understand or can be very lengthy and time-consuming to comprehend. And so, I think, this is what makes it so interesting and so different to the Canadian investor. And so this is where I think advisors can demonstrate their expertise and their knowledge, their deep-seated experience and knowledge in this area. There is, obviously, you know, they have their, you know, certifications for a reason and they are experts in the field. And so I think that they don’t, like I said, they don’t have to feel pressure to be in the conversation, but at least be aware of what’s happening, and they can demonstrate their expertise that way. 

Kevin Press:  

Yeah, I think YouTube would be a better place if more financial advisors were on there. 

Stephanie Wolfe:  

I agree. I agree. And, you know, I think that we are starting to see that as well. Global X does have our own YouTube channel, and we are always looking for new content and information that we can share out. So, having experts come in and speak to us is always a great avenue to take. 

Kevin Press:  

Can you walk me through the process? How do you vet influencers that you’re interested in working with? And then, how do you work with them? What does that look like? 

Stephanie Wolfe:  

Yeah. Well, not every financial content creator is the same. Everybody has different areas of expertise that they focus on. Some of them have different audiences in terms of their age or demographics. So all of that is taken into consideration. And then, of course, we have a very strict legal and compliance process that we move through. The people that we have engaged with over the last year and a half have been vetted through a very strict process of looking through background information, their posting, and content. And, of course, then anything that we are creating in partnership with them is labelled appropriately. As, you know, this is an ad, this is done in, I have been paid for this. You know, the finfluencers do say upfront that they have been paid-this is a paid partnership with Global X-and the content is all compliance-approved as well. We want to ensure that the content that we’re delivering through each of the content creators is appropriate, it’s not product-pushing, it’s educational in nature. We do have our own standards that we apply to that as well. We want to make sure that we’re giving Canadians the right information that they can then use to make informed decisions moving forward. And so, I think it’s evolved, right? And we do follow the regulatory guidelines very closely to ensure that we’re adhering to all the standards. And, I would say, you know, maybe we go above and beyond that as well. We’re very cautious about who we partner with. Because, at the end of the day, you know, we don’t want anybody misrepresenting anything that we’re, you know, selling to Canadian investors. 

Kevin Press:  

A big-picture question for you. Do you think that the rise of these financial influencers reflects on the industry’s ability to connect with Canadians? And what is the gap that they’re filling? 

Stephanie Wolfe:  

I think it’s really just making that information that once felt so inaccessible around the financial services area, accessible. You know, and different financial content creators have different approaches in how they do that. And, you know, some are, you know, if I’m going to use Jon Erlichman for an example, you know, he became known for his famous dances that he would do up and down Bay Street, and that was how he became recognized and how he did it. Dances being that it was always tied to something interesting, stock prices going up or down and where they were if you had invested, say, at an earlier date. And so, it’s just information that I think is closing that gap and making it seem not as intimidating as I think many once thought that it was. 

Kevin Press:  

Stephanie, thank you for doing this research. So interesting, and thanks for being with us. 

Stephanie Wolfe:  

Thank you very much for having me, Kevin. And this is something that we will continue to keep an eye on, and we’ll likely be doing another stab at this research in the coming months. 

Kevin Press:  

My guest has been Stephanie Wolfe, Executive Vice-president and Head of Marketing at Global X Investments Canada. Canadian Advisor.cast is a production of Newcom Media. It’s produced by Alisha Hiyate. Noushin Ziafati is our associate producer. My name’s Kevin Press. Thanks for being with us.