Projected to make up 46% of the workforce by 2020, the millennials surpassed the Baby Boomer generation in sheer size this year.¹ Being 75.3 million strong, they’re anything but quiet. They’re perspectives on life and personal finance along with their demands vary immensely from their Boomer predecessors. While their grandparents took concern more often with home ownership, retirement, and estate planning, millennials bother less with these aspects of personal finance. A recent InvestmentNews article considered the financial services millennials really value. And with a little exploring them, advisors can find creative ways to relate to this younger generation. Let’s take a look.
Surprisingly enough, medical advancements come into play for millennials thinking about retirement. Why? Simply put, they’re expecting to live longer than previous generations. This elicits a very different regard for retirement planning – they see it as too far off. They’d rather not discuss it quite yet, so consider tabling this discussion until 5 or ten years down the road and focusing on other, immediate needs.
Student debt is also the new norm (and at the average amount of $30,000 per millennial) which gives advisors and financial planners the perfect opportunity to replace the retirement discussion with one about loan payment options, appealing to millennials’ immediate needs a bit more.
Along the same lines, more than any other generation, millennials are pursuing higher degrees. Whatever the drive – money, fear of the real world, career change, mere desire to excel – millennials are enrolling at a higher rate and making up 40% of the unemployment population following their graduation. And for those who haven’t made the move, they’re probably thinking about it. Regardless of final decision, one commonality across the board is the daunting monetary investment required for a higher education. Advisors can play an integral part in the “To MBA or Not MBA?” question² by walking millennials through the financial planning of whether a master’s degree will render ROI and a bigger paycheck down the road.
As discussed in a recent blog post, female investors offer a niche opportunity for financial advisors. For the select few of you not convinced by this quite yet, what I am about to say may tip you over the edge. When it comes to female millennials conducting salary negotiations, they typically request less than their male counterpart. And get it. Advisors can play a role in helping millennials – both female and male – navigate salary negotiations, helping them realize that asking for just 5-10% can make a significant difference for long-term financial planning.
Furthermore, when it comes to career planning, the average amount of time millennials spend at one company differs greatly from their predecessors. Whereas recruiters and hiring managers used to place more weight on the experience of 4 or more years at one company, two now suffices. With the constant career shifts, millennials are faced with varying 401k options, as well as health and wellness benefits that seem increasingly complex. Advisors can lend a hand in guiding millennials through their options and what may fit them best as they navigate those decisions.
Short Term Ambition
Some have the travel bug, some are considering launching a start-up – whatever the short term goal may be, millennials want help planning for it. They would rather monetarily account for 1-5 year plans, as oppose to 10-20 year plans. And they’ll look to an advisor who can help them strategize on how to trek around South Asia for six months or bring their new app to market.
So nix retirement, nix estate planning conversations- at least for now and for most. These are typically not top of mind for the under-40 crowd. By catering to the career aspirations and personal finance goals of the younger generation, advisors can tap into unique ways of connecting with and ultimately onboarding millennials as clients.
At SS&C Advent, we’ve observed and digested the varying goals of different generations and built flexibility into our solutions so there’s a little something for everyone. By tapping into the power of technology – elegant interfaces, convenience through mobility, reporting on the fly, account aggregation and more – we’ve developed Black Diamond to help advisors more fluidly grow their firm and appeal to investors of all ages. Integrations with CRM, financial planning, proposal generation and analytics systems allow advisors to cater their conversations and services to best understand the financial needs of clients.
Ready to explore more Black Diamond features that can help you attract the next generation? Look no further.
Anne Acosta is Senior Manager of Solutions Marketing and leads Advent’s marketing efforts in the advisory space. Joining Advent in 2004, Anne’s financial technology experience spans product marketing, competitive intelligence, product management, and consulting in wealth management and capital markets segments.