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January 20, 2016 at 09:00 PM
Chances are that if you have heard of Snapchat, it’s because you have a teenager who uses the app to send friends goofy selfies or videos, which then disappear within seconds after viewing.
However, thanks to a Reuters story, the rumor mill is churning that Snapchat is about to enter the robo-advisory world, though the company has yet to officially confirm this development (but they aren’t denying it either).
How and why would a decidedly social app delve into financial advice? First, let’s look at Snapchat’s demographics. In comparison to all the other leading social networking sites, Snapchat is the 10,000-pound gorilla in terms of users in the 18-34 year old age bracket, aka millennials. Seventy-one percent of their users fall into this category compared to the next closest app, Vine, with just 51% — Facebook, Twitter and others are well below these numbers.
Millennials are the primary users of Snapchat and this has been the oft-cited group of potential investors that are the most difficult for advisors to reach.
Recently, Bank of America/USA Today released the latest installation of their report on the financial habits of millennials. In addition to findings such as 41% of millennials are “chronically stressed” about money, the survey asked them which categories they felt they had expertise (multiple responses were allowed). The results: 34% replied “social media”, 23% said health and wellness, 17% in personal finance and a paltry 5% responded with “investing.”
To summarily answer the “why” part of the initial question: Snapchat’s users are primarily millennials. Millennials are saying that they have much more expertise in social media than investing. The powers that be at Snapchat seem to believe that they can find ways to assist their number one demographic with investing techniques that speak directly to them.
