What Millennials Look for in Financial Advisors
It is no secret that millennials are on the mind of every financial advisor and every firm in the financial industry, and for a good reason too. Millennials are the future clientele and customers for the millions of financial professionals in the United States, as they will inherit around $68 trillion by the year 2030. However, attracting and acquiring them has been a challenge for the entire industry as the ~80 million individuals have different expectations, behaviors, wants, and needs than any other generation before them.
Let's break down how financial advisors, financial professionals, and the wealth management industry can acquire and attract millennials for years to come.
We will cover the following topics:
- What do millennials look like and how much money do millennials have, and will they inherit
- What millennials want in a financial advisor and how can financial advisors attract millennials
- How will millennials find financial advisors
- What services do millennials want, and what problems do millennials have
- Millennial women and their struggles
- Millennials and robo-advisors
Will millennials use financial advisors?
To best help financial advisors and professionals attract millennials, they must understand some basic information about them.
The millennial generation includes people born between 1981 and 1997, and there are currently around 80 million millennials in the United States. Some of the most notable differences between millennials and other generations are related to their use of technology. These individuals grew up using AOL AIM to instantly chat with their friends, which evolved into their obsession with Facebook to see people's pictures and mutual friends. Their technical tendencies of connecting with people online have fundamentally shaped their behaviors, which can be seen in how they shop, make decisions, meet people, and work. Millennials do not make a move without first doing online research, which is why 91% of people between the ages of 20-36 "trust online reviews as much as personal recommendations," according to a Qualtrics study.
Financial advisors and financial institutions must take note of the latter as they often rely on referrals to build their books of business. However, referrals alone won't cut it, as millennials will look online to validate any recommendation. This is why AdvisorFinder is helping millennials research financial advisors, which allows advisors enhance their online presence and land more meetings.
You may doubt that your online presence will neither make nor break a potential client, but let us explain why you are likely mistaken. Your online presence has the power to tell future clients your unique story. In other words, it is social proof. Social proof for financial advisors is essential as it conveys their credibility to prospective clients. Think about your own behavior for a second - when was the last time you made a significant decision without doing online research? Have you gone to a doctor or restaurant that has no website or an outdated one? Likely not.
Now that you understand what millennials look like regarding their behaviors, ages, and future inheritances, let us explain what they want in a financial advisor.
What do millennials want in a financial advisor, and how can financial advisors attract millennials?
You have likely read that millennials don't want a financial advisor, but we are here to bust that myth, which will be discussed later in this article. Let's dive into what millennials want in a financial advisor. Do they care about price, service, diversity, and technology?
Now that you understand some of the fundamental behavioral changes of millennials, it is easy to answer the question about technology. Do millennials want to work with a financial advisor who cares about technology? The answer is yes!
Many millennials are digital natives. They expect amazing online experiences driven by great technology. The kind of digital experiences they want with financial advisors begin before they even work with one, which includes:
- An easier way to find an advisor online
- A better way to research an advisor online
- An easier onboarding process
- Websites or apps to view their investments, documents, and plans
Millennials are accustomed to looking online to find and research a doctor, restaurant, flight, and even a villa in Costa Rica - they expect the same when finding a financial advisor. However, their expectations still need to be met despite the $32 billion spent by financial services companies on digital advertising each year.
Millennials want financial advisors to have updated websites with updated pictures, easy-to-access information, and calendar booking systems. They are used to receiving information instantaneously, and that includes information about you, the financial advisor. The good news is that you have access to website builders and calendar booking systems, as well as an AdvisorFinder profile which provides your prospects with all the information they need to know about you and a place for them to book a meeting with you.
Additionally, financial advisors must provide their prospects with a digital and easy onboarding process. Note: focus on only asking the most important questions in your onboarding process. Click here to learn how you can improve your onboarding process!
The last thing most advisors do well at is providing their clients with an online dashboard that shows the activity in the account, holdings, documents, and more. This is a must.
Besides technology, what else do millennials want in a financial advisor? This is valuable information to you because it can be used to enhance your marketing messaging and respond directly to their needs.
Millennials are seeking financial advisors that have similar lived experiences to them. As an advisor, you need to be comfortable opening up with your prospects about your own life, whether it's wins or struggles. Similarly to shared experiences is the desire to work with a financial advisor that shares a similar background or focus.
As a financial advisor, you can respond to the above by focusing on specific types of clientele like first-generation Americans, women, or even more niche than that.
How will millennials find financial advisors?
This is the question on everyone's mind - how will millennials find financial advisors? Based on some of the topics discussed above, we can determine that referrals alone won't cut it, but they will remain a way that millennials find advisors.
More than ever, millennials will be looking online to find an advisor, meaning financial advisors must start focusing on what they look like online as much as what they look like offline or in person. However, having a website and decent social media presence will not cut it, which is why nearly 50% of prospects have removed a financial advisor from consideration based on what they saw or couldn't find online.
Here are some things to help millennials find you online, as well as a list of things they want to see:
- Highlight who you are and why someone should work with you
- Make sure they understand who you work for
- Make sure you are explaining the services you provide
- Include updated photos of yourself in both professional and non-professional environments, like you with your family or doing hobbies you enjoy
While millennials aren't directly going on social media to find a financial advisor, they may just see a piece of valuable content from one. This has been a driver of growth for some advisors, but be cautious of posting dry content that only reaches other financial advisors.
What services do millennials want and what problems do millennials have?
After understanding how millennials will find a financial advisor and how financial advisors can attract millennials, the next step is understanding what services millennials desire.
First, some of the most notable challenges millennials face are dictating the types of services they want. Millennials want to pay down debt, they want to buy a house, they want to save for their children's education, they want to travel, and they want to help their parents in retirement. Remember, many millennials are recovering from lost wealth from stock market crashes.
Millennials want investment management. Most millennials began investing during one of the most significant bull markets of all time, which trained their brains to think they could do it themselves. However, the last two and a half years have proven otherwise. More millennials feel uncertain about their ability to invest and plan for their financial future and their family's future, which is why they are turning to professionals for help.
Millennials want financial planning. Millennials are more detail-oriented than most people think, and they like planning! They plan out their days and weeks and their workout schedules. They expect to receive a financial plan from their advisor, but there is a caution to this. The extremely long financial plans are confusing and will lead prospects to think twice about working with an advisor. Note: try to stick with simple plans and explanations.
Let's break down what services people expect versus what they receive - it may surprise you!
As you can see, people are expecting wealth transfer advice and estate planning advice, but are not having their needs met.
Financial advisors, you can market the services that people expect:
- Estate planning
- Real estate advice
- Tax planning
- Wealth transfer advice
- Tax loss harvesting
- Financial planning
- Investment management
Remember, the problems that millennials face need to be addressed by you before you meet with them. This can be done on your website, marketing messaging, and on your AdvisorFinder profile.
Millennial women and their struggles
Related to the discussion above, the problems millennials face are one of the most significant issues, as well as opportunities for financial advisors. Women - millennial women and beyond.
A study by Merrill Lynch found that 75% of women under the age of 45 manage their own finances, and 50% of women over the age of 55 manage their own finances. These are unfortunate statistics as women are increasingly overlooked and underserved, which negatively impacts their ability to weather financial challenges in life.
The study by Merrill Lynch also noted that younger millennial women are twice as likely to be the primary decision-maker in the household. Additionally, a McKinsey study found that women are expected to control $30 trillion in assets by 2030.
The combination of women managing their own money, them being more likely to be the primary decision-maker, and the future inheritance of $30 trillion opens the door to a massive opportunity for financial advisors. However, there are differences in working with women versus men.
The McKinsey study mentioned above noted that women have a greater demand for advice, lower financial self-confidence, are less risk tolerant and have more of a focus on real-life goals. Additionally, women are likely to live five years longer than men.
What can financial advisors do to help women?
Financial advisors must understand the unique differences between helping men and women, as described above. This information can be valuable in describing the services you provide and explaining your focus on achieving goals in life. Financial advisors providing financial planning to women are more likely to win their trust. According to the CEO of Blue Ocean Global Wealth, Rita Cheng, CFP®, "With financial planning, conversations begin with goals rather than the transfer of money or market outperformance. The more we're able to communicate this broadly, the better positioned we're going to be to answer the call for female clients." Interested in meeting with Rita Cheng? Browse her AdvisorFinder profile here.
Note: AdvisorFinder is constantly looking for women financial advisors who want to reach more prospects and increase their online presence. Learn more here.
It is safe to say that women represent an enormous opportunity, but it is important to note the differences in their needs!
Millennials and Robo-Advisors
In 2015-2016, nearly every financial institution and financial advisor heard the words, "robo-advisors will replace financial advisors." Well, in 2022, we can see that is not the case. In fact, there are about two independent robo-advisors left standing, with the others being acquired for clientele or closed down.
As of late, we saw a deal between UBS and Wealthfront about to take place. However, the deal was canceled as concerns were raised. So, do millennials want robo-advisors or financial advisors?
The answer is clear. Millennials want financial advisors! Here are some interesting statistics around this topics:
- "Millennials are more likely to have a financial advisor than Gen X and Baby Boomers"
- 5% of investors use a robo-advisor
- 50% of millennials need a financial advisor and 75% of them want a financial advisor to help them reduce their risk and plan for their retirement.
With almost 80 million millennials in the United States, they are the future clientele and customers for the millions of financial professionals. They will inherit around $68 trillion by the year 2030, and 80% of them will move financial advisors after receiving their inheritance.
It has never been more critical for financial advisors to pay attention to these statistics as their businesses are at risk. Millennials have different needs and wants, they expect to find people and information within a few seconds of an online search, and they will make a decision regarding a financial advisor's credibility and trustworthiness by what they look like online.
The good news is that AdvisorFinder is an online platform that is designed to attract millennials and help them find financial advisors. With AdvisorFinder, every financial advisor will have their own profile, which will show up when a millennial searches for them online. It is meant to help financial advisors modernize their businesses and reach more prospects.