What Financial Planners Need to Know About Millennial Clients
The article explains that financial planners need to adapt their approaches to effectively serve Millennial clients—who, despite facing financial challenges like high debt and housing costs, are optimistic about their financial futures due to greater financial literacy and access to advisors—and emphasizes that Millennials seek trustworthy, personalized advice beyond what investment apps offer, making it crucial for planners to build credibility and connect using strategies similar to online influencers.
Many American Millennials—those born between 1981 and 1996—are advancing in their careers, building businesses, starting families, and planning for their futures and their children’s. These life stages are set against the backdrop of rising housing costs, high student loan debt, and other financial barriers.
According to a recent Mind and the Market Investor Sentiment Survey, 82% of Millennials are more confident about their financial futures compared to older generations. This optimism is largely attributed to their access to financial advisors. However, to work effectively with Millennial investors, financial planners must adapt beyond traditional approaches.
Why Attract Millennials to Your Financial Planning Practice?
Millennials became the largest generation in the U.S. workforce in 2016 and are projected to make up 75% of the workforce by 2025. It’s important for financial planners to understand how Millennials differ from Boomers and Gen X. Millennials are more financially literate at a younger age due to easy access to information, which may lead some to question whether they would pay for financial planning services.
A 2022 Investopedia Financial Literacy Survey found that, despite their confidence, three out of four Millennials are stressed about managing their finances. Common financial obstacles include:
- Establishing a budget
- Building retirement and emergency savings
- Managing debt
While Millennials are knowledgeable and recognize the importance of financial planning, they understand that investment apps and online resources cannot provide the personalized advice that a financial advisor can.
Attracting and Serving Millennial Clients
Young investors seek trustworthy advice on their financial goals and aspirations. They want to distinguish experts from amateurs and avoid social media scammers. Financial planners can connect with Millennials by adopting some of the same strategies used by online influencers.
Dr. Daniel Crosby, Ph.D, Orion’s Chief Behavioral Officer, suggests reaching out to and educating potential Millennial clients in a low-pressure manner, focusing on genuine care and empowerment.
Use Digital Channels
Millennials are frequently online, making it crucial for financial planners to engage with them digitally. Strategies include:
- Establishing a social media presence
- Leveraging online reviews
- Creating and sharing content regularly
- Expanding reach beyond the local area
Offer Value
Building relationships and trust is key. Provide value specific to Millennials by educating them on various types of planning:
- Life-stage planning: Preparing for college funds, buying a house, or growing a family
- Value-based planning: Aligning financial priorities with individual belief systems
- Total well-being planning: Developing a wealth management strategy for long-term success
Personalized support is highly valued by Millennials once a genuine connection is established.
Support Clients with FinTech
Millennials expect a seamless digital experience in financial planning. While hands-on advising remains important, leveraging technology is essential to provide the personalized, holistic relationship Millennials desire. Consider implementing digital tools such as:
- 24/7/365 access to information
- Financial planning tools
- Customized products and investment services
- Automated trading and rebalancing tools
Although Millennials appreciate financial technology, they also expect highly personalized advice. Using advisortech during the planning process can elevate your services.
Financial professionals have a significant opportunity to work with a generation seeking deeper relationships with their advisors. Investing in technology to meet expectations for advice, deliver an exceptional digital experience, and offer frequent touchpoints is key to attracting Millennial clients and ensuring long-term success as a financial advisor.