Millennials—you either love ’em or you hate ’em. They’re passionate about causes like sustainability and social responsibility, but they’re also upending traditional American institutions like marriage and casual dining.
Either way, millennials now make up the majority of the global workforce, and as they rise to the top, they’ll be looking for financial advisors to help them manage their growing wealth.
Benefits Of Working With Millennials
Even though millennials have been labeled as entitled, picky, and impatient, they have good qualities too. They are intentional about making choices that align with their values. They like to work for companies that boast a greater purpose to make the world a better place to live. They’re achievement-oriented and love to collaborate to solve problems.
But besides these good qualities, there are three main reasons why financial advisors might want to start setting their sights on millennials.
Majority Of Workforce
As I said, millennials now make up the majority of the workforce. They’re in the early wealth-building stages of their lives. And although they’ve gotten off to a rocky start after the Great Recession of 2008, many have found success as entrepreneurs and in higher-level positions in their careers.
Over the next couple of decades, millennials will replace older generations as investors and real estate owners, so they’ll need financial advisors to guide them toward financial success.
Inheritance From Older Generations
Millennials are also projected to inherit over $68 trillion from their baby boomer parents by the year 2030. Some believe that millennials will be the richest generation in history after this wealth transfer occurs.
And huge inheritances will mean that financial advisors are in high demand.
Growing Complexity Of Financial Needs
As millennials get older, their financial complexity keeps growing. In fact, I’m one of the oldest of the millennial generation and I need help from my advisor with all of the following:
- Retirement planning
- Tax planning
- Life insurance
- Real estate
- College planning for my kids
- Long-term care planning
- Estate planning
Because of the life stage that millennials are in or approaching, they have a lot of financial planning needs you can help with.
What Millennials Need From You
Working with millennials might seem less desirable than serving older, high-net-worth clients. But financial advisors who choose to work with them now are playing the long game. This could ensure the success of your business for decades.
Millennials do come with unique challenges, and financial advisors may have to adopt new strategies in working with them. Below, I explain a few things to be aware that millennial clients might need.
1. Debt Repayment Plans
Millennials are reckoning with enormous amounts of debt, mostly stemming from student loans. At this point in their financial journeys, millennials need advice on debt repayment plans. They’re looking for strategies to pay off their debt faster. As an objective financial advisor, you can offer them strategies and plans that they may not otherwise see as options.
And when it comes to net worth, millennials’ current positions are (to put it mildly) lagging behind. In 2019, millennials’ net worth averaged at a mere $8,000, even though they’re between 24-39 years old. As they pay down their debt, their net worth will increase. They’re getting there.
For now, they need your advice on how to grow and manage their net worth so that they can develop into the high-paying clients you want to see down the road.
2. Comprehensive Financial Planning
In addition to debt repayment plans, millennials need comprehensive financial planning advice. They need help starting or boosting their retirement plans and saving as much as they comfortably can.
Millennials are also increasingly entering the real estate market. Most millennials state that the biggest obstacle they face when it comes to purchasing a home is not being able to save enough for a down payment.
Helping your millennial clients set realistic savings goals—and keeping them accountable to those goals—will bolster their confidence in your expertise and advice for years to come.
Not surprisingly, millennials may not have the capital right now to meet your minimum investment requirements. If possible, you may want to consider lowering your minimums for this clientele in the early years to develop relationships that could pay off in the long run.
3. Virtual Availability
Millennials prefer to work virtually as much as possible and spook at the prospect of phone calls and in-person meetings. Even before the COVID-19 crisis compelled many companies to switch to remote operations, millennials were already working online and seem to prefer careers that allow them flexible remote-work options.
As first-generation digital natives, millennials are comfortable using online spaces in almost all areas of their lives. And millennials often work multiple jobs to make ends meet, so they appreciate saving as much time as they can by scheduling meetings and other work online.
In fact, a Gallup poll found that 87% of millennials already use the internet to manage their finances. They’ll likely be comfortable meeting with you virtually and using screen-sharing options to go over financial documents and plans. If you’re able to accommodate millennials’ online preferences, they may be even more inclined to work with you over other financial advisors.
Perhaps most of all, millennial clients want to know that they can trust you. They want to understand your process and know that you’re working with their best interests in mind.
Millennials have been through two financial crashes since reaching adulthood, so they’re skittish when it comes to investing in the stock market and buying their first home. Your reassurance in these areas—as well as your transparency—will encourage them to put their money to work for them.
Millennials value education and transparency. Most advisors I work with value client education as well. You won’t find more eager listeners or invested self-educators than millennials, and you may find their enthusiasm for what you do to be rewarding in and of itself.
We Can Help You Attract Strong Millennial Clients
Ultimately, millennials want to do better for themselves and for the world they live in. In the coming years, we predict that they’ll be hiring financial advisors at record rates. Financial advisors who understand and adapt to millennials’ unique needs (and quirky personalities) are setting themselves up to be in business for decades to come.
If you need help marketing in a digital world and adapting your firm toward millennials, we’re here for you! We’ll start by aligning your marketing strategy with the unique needs of this clientele. Schedule your free call and get customized recommendations on how you can best reach the next generation to keep your business growing for decades to come.
Claire Akin runs Indigo Marketing Agency, a marketing firm serving top independent financial advisors. Claire is a former Investment Advisor Representative who holds her MBA in Marketing from the Rady School of Management at UC San Diego as well as a BA in Economics from UC Davis. It’s her goal to help specialist advisors target their ideal prospects with content marketing.