Millennials, for a variety of different reasons, are generally regarded as an age group that does not have a lot of extra money or investable assets, which is why financial professionals may not be knocking down doors to win their business. However, as baby boomers continue to age, millennials are expected to receive what could be the largest transfer of wealth in history. Below, we forecast what’s to come for millennials in the advisory space, and how firms can grow their practice with this demographic as they age and acquire more wealth over the decade.
Make the connection early. While millennials may not be our target audience now, their parents (the baby boomers) are, and we work closely with them to understand the family’s financial values, philanthropic efforts and estate and legacy plans that will inevitably impact the millennial children. By establishing a connection with the millennial children whenever possible (either through family meetings, providing pro-bono financial advice, etc.), it can lay a foundation early and strengthen the chances of working with the millennial when they do come into wealth.
Stay the (philosophy) course. I agree that millennials may face unique lifestyle and fiscal challenges in today’s economy – think rising student loan debt, a mediocre job market, etc. However, that shouldn’t significantly change the way advisors formulate their investment or financial plans. At Fort Pitt Capital, our philosophy has stayed the same for the last 20 years – being value focused and long-term oriented – and we plan to stay true to this management style in order to successfully work with younger clientele. We need to stay the course by focusing on successful investment philosophies, but of course, understand millennials’ portfolio needs, goals and time horizon to create a working financial plan.
Mind the match. It’s important to have a welcoming and non-intimidating persona when working with millennials, who might not have a good financial grounding or are recently coming into wealth. Aside from personality connections, we’ve also hired younger advisors who will eventually be paired with incoming millennial clientele. The age connection is important in not only making this demographic feel comfortable, but in having them feel confident from a longevity standpoint that their advisor will grow old with them; overseeing their money and financial plan for years to come.
Shift communication styles. We get it—millennials like to be “in the know” and have quick access to information. Understanding these characteristics and shifting communication efforts can also be helpful in working with millennials. They often prefer emails over long phone calls and, if favored, virtual meetings may take precedence over in-person office meetings, so the advisor should be mindful of these communication preferences and work to accommodate those requests.
As it stands, the industry is in the midst of what could be an enormous shift of wealth. As millennials come into more affluence, it will be imperative for advisors to grow and change with this demographic, especially if they themselves expect to grow and remain successful as a business.