Practical Tips for Understanding and Connecting With Millennial Investors

Written by CUNA Mutual Group Annuities

With each generation comes a new attitude toward investing and, for many, greater worries about their financial futures and how their retirements will be funded. Millennials have been subjected to a variety of negative commentaries and stereotypes in recent years in regard to their attitudes toward finances and investing, but there are conflicting studies on how well they’re preparing for the future.

A survey by Natixis Global Asset Management suggests that nearly wo-thirds of Millennials believe they’ll be able to rely on an inheritance to fund their retirement and, thus, may take an ambivalent approach to personal investing beyond what is offered by an employer. In that same survey, nearly half of Millennials see their children as potential providers in their old age.1

Another survey by Bank of America, however, contradicts those findings and holds that Millennials outscore their parents in almost every aspect of personal finance, from savings and budgets to the overall degree of financial security. As stated in the report, “It turns out that Millennials are actually just as good, or better, than other generations when it comes to managing money, and they are getting their financial houses in order.”2

It’s likely the truth lies somewhere in between and, regardless of the approach Millennials take with their financial futures, the underlying motivations often remain the same: worry and fear. Even though a growing number of Millennials are investing, many are concerned about the uncertain implications of taxes, fees and extended longevity. Many are also watching their parents work well into their golden years — the impact of poor financial decisions of the past combined with a slow recovery from the Great Recession — and are now seeking ways to avoid making the same mistakes.

Millennials Rely on Advisors for Guidance in Different Ways

Advisors who are strategizing ways to attract a younger generation of clients or seeking to connect with the family members of existing clients, must contend with the wide range of worries and attitudes toward retirement. They must also contend with the ways in which Millennials want to work with them. Millennials understand they need advice and education to get on the right track, and they want help. Studies show that when a decision is high-investment, has lengthy consequences or presents a sizable knowledge gap, people tend to lean on an expert,3 so many younger investors are placing a greater value on advisors to help them achieve their life goals.

The ways in which Millennials want to work with advisors is vastly different than their parents, however. Here are some tips for engaging and connecting with them.

1. Go Beyond the Brochure

In general, younger generations are seeking an experience. Many of today’s investors aren’t content with glossy brochures, pie charts and colorful graphs being slid across a desk after the first few minutes of introductions. In all areas of life, from careers and personal relationships to social platforms and networking, Millennials are seeking connection, collaboration and trust. It’s what they value, and it’s no doubt they value the same virtues when it comes to their financial advisors.

Connecting with this generation takes more than an extended chit chat at the start of a meeting; the hard part is getting them to that meeting in the first place. It is beneficial for financial advisors to understand the nuances of engaging with younger generations if they expect to retain existing client assets that will most often be left to their children and heirs. Doing so will require adapting traditional business models and connecting with younger clients on their terms.

2. Clear Away the Confusion

Increasingly, investors want interactive online experiences and online account management. They want to have the ability to do their own research on recommendations prior to making a decision. The overload of conflicting information found through online searches can cause some people to feel overwhelmed, however, leading them to avoid making decisions for fear of making a mistake. It’s the advisor’s role to clear away the confusion, tune out the excess noise and provide straightforward answers and guidance to reassure young investors.

3. Get Social

Advisors should also consider their presence on social media channels where they can demonstrate their thought leadership, share articles and bits of advice, and maybe even be accessible via private messages. Meeting investors on their terms may mean foregoing the typical phone call and reaching out via text or online chat instead. Social media is also a way for advisors to build trust by sharing articles, personal insights or photos, and showing their human sides through volunteer work in the community, family time, interactions with colleagues and more.

4. Leverage Referrals

Advisors also need to understand the power of connection as it relates to building their client bases. While referrals have always been an important part of garnering new clients, it’s even more critical among younger generations. Millennials place greater trust in the opinions and recommendations of their peers, and advisors shouldn’t hesitate to ask for referrals and leverage the extended networks of their younger clients.

Appealing to younger investors requires a shift in how advisors may have attracted clientele in the past and a focus on managing personal fulfillment as much as personal finances. Learn more about how to engage and provide guidance for a new generation of investors in our easy-reference infographic, Continuing Relationships With The Next Generation (Opens in a new window).

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