4 things Millennial investors expect from a financial advisor

When you hear the term “Millennial,” what comes to mind? Admittedly, this generation has had to overcome some not-so-favorable stereotypes. It’s important, however, for advisors to not place the Millennial generation in a box when it comes to financial advice. That’s because… Millennials are grown ups now.

And they face challenges that generations before them may not have, making a financial professional’s role more important than ever.

As the clock ticks, Millennials (born between 1981 and 1996) may be concerned about their lost years. Many entered the workforce during the fallout of The Great Recession, impacting their earnings abilities during those formative early years. Instead of investing and earning compounding interest, many may have been burdened with compounding student debt.

With the oldest of the generation in their early 40s, many have families, homes and other economic stressors that are often associated with older generations. This generation is larger than any other,1 however, they hold far less wealth.2

How much less? The contrast is staggering. Despite being the largest population segment, Millennials hold only 6.5% of the nation’s wealth.2 Together, Baby Boomers and Gen X control more than 81% of the nation’s total assets.2

Will some of the wealth held by older generations pass to Millennials as part of the Great Wealth Transfer? Possibly. Regardless of whether they have little or stand to gain in the future, the need for strong financial guidance remains.

Establishing a strategic financial plan amid significant economic and global upheaval while watching markets ebb and flow in response may only add to Millennial skepticism and make them wary of investing. These feelings of skepticism may also seep into their attitudes toward financial advisors. It begs the question:

What attributes and tools do financial advisors need to reach and build relationships with Millennial investors?

1. Authenticity

Becoming a trusted resource to this investment-wary group isn’t going to happen overnight. As is true with all clients, communication and transparency are key to earning your place as a financial guide — and it starts with empathy.

Convincing Millennials of your expertise by delineating your degrees and designations might not impress or matter; a sales pitch and hard sell probably won’t resonate with a Millennial’s approach to investing. Instead, frame the conversation in a way that demonstrates you are focused on their financial future, that you understand the goals and challenges they face, and are willing to partner with them to achieve desired outcomes.

2. Simplicity

Entering the world of investing can be confusing enough with its myriad options and intricacies. Refrain from adding to it with complex industry jargon and extensive, mind-numbing actuarial data. Industry terms that are second nature to you might be confusing and off-putting to newer investors. They may wonder, “What is meant by small-, mid- and large-cap funds? What’s the difference between a mutual fund and an index fund?” 

Opting for straight talk about financial products and services and market performance may be just the trust-builder Millennials are looking for. For that matter, avoiding confusing financial jargon is generally a good idea no matter who your client is.

3. Accessibility

Younger investors may tend to take a hybrid approach to investing. There will inevitably be some who prioritize face-to-face meetings. Not surprisingly, however, younger, tech-savvy investors may prefer online financial tools to aid in planning and may be lured by do-it-yourself platforms and robo-advisors. However, recent market volatility and uncertainties surrounding crypto-currencies may have caused some DIY investors to reconsider their self-taught investment prowess.

Leveraging an ideal combination of personal attention with an online presence may spur action among Millennial investors who don’t currently engage with a financial professional. Those who seek assistance from a local advisor to help manage their finances are likely to conduct online searches. Will they find you? Providing online tools and resources may demonstrate your relevance and help you engage.

4. Connectivity

Don’t assume that access to online financial tools is enough. Younger generations are more likely to check their smartphones and engage on social media to form connections. Connectivity is important to young investors, and they expect their advisors to engage beyond traditional means. Are you active on social platforms?

Some advisors thumb their noses at social media for business purposes, but it’s worth considering for those who want to reach younger investors. Granted, you likely won’t rise to become the next big influencer or media sensation with thousands of followers, but even a small presence while sharing level-headed investment tips and sound principles may help you earn a following and, more importantly, trust. 

Without engaging in the ways Millennials prefer, you could be unwittingly dissuading young investors from working with you. That said, it’s important to check with your compliance department for any rules surrounding social media engagement.

For the most part, financial planning is on Millennials’ radar, but the process and roles the advisor plays are shifting with the next generation. Remain relevant and responsive to young investors, and understand more about their hopes and fears with our online resource, Three Myths About Millennials — And the Truth Behind Them

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