Millenials financial advice

Millennials Want Financial Advice – on Their Terms

It’s impossible to ignore millennials, the generation born between 1980 and 2000. They are the largest generation in U.S. history, numbering nearly 80 million.

And, although they don’t have significant assets today, it’s projected millennials will control $7 trillion in liquid assets by 2020 and likely inherit more than $40 trillion from their parents and grandparents.

Over the last year we have studied millennials; reviewed the research, interviewed them (including financial advisors who are millennials) and considered their impact on our industry.

We believe millennials will profoundly change the financial advisory business in three important ways, as discussed below, and have summarized our findings and recommendations in a whitepaper, Marketing to Millennials.

  1. Millennials are the first generation where many will lead non-linear lives. Faced with the likelihood that they will work well into their 70’s, millennials don’t want to wait until then to travel, volunteer, or simply take time to reflect. Rather than living their lives in the linear sequence that their parents and grandparents followed – school, work, and retirement – millennials will transition in and out of work, perhaps trying a different career, or returning to school.

This change will require financial institutions to rethink how they create financial plans and manage assets for their millennial clients. More than previous generations, their needs and expenses may vary over time, and they will want to save not only for old age but also for the periods in their lives when they may not be working. One of the challenges will be getting them to start saving young, when they will have the advantage of time, a good reason to consider reaching out to them now.

  1. For millennials, business and personal relationships often develop simultaneously. While traditionally advisors have gotten to know their clients first on a professional basis and then moved to a personal relationship, Google and social media have turned this inside out. It’s not unusual today to know quite a bit about someone’s personal life before even meeting them.

This means financial advisors need to have a social media presence, and let millennials know who they are, what they do, and that they understand their needs.  On the positive side this is a generation that believes in sharing. They prefer to find professionals—doctors, lawyers and financial services firms—through their friends’ recommendations. And, of course, their definition of friend is broad, extending to anyone with whom they interact on social media.

  1. Millennials communicate in more ways than previous generations ever imagined. Advisors will need to be able to talk with their millennial clients via text, Skype, or Whatsapp. In addition to using new forms of communication, they should recognize that millennials are more informal when it comes to dress and speech.

Millennials’ lack of formality does not mean they are any less concerned about their financial futures. It may mean, however, that they find the paperwork that is standard operating procedure at nearly all financial services firms antiquated or that the traditional client meeting is done online or at lunch. They will expect information at their fingertips, as it is in other parts of their lives.

Whether you like change or not, it is upon us. Financial advisors that ignore these changes do so at their peril.

Note: this post is adapted from an article that first appeared in the author’s newsletter.

Libby Dubick marketing to millennialsLibby J. Dubick has more than 30 years of experience in financial services marketing, strategy and distribution. She is an expert in the financial advisory market, and has developed and managed original studies on advisors’ product usage and best practices as well as on investor attitudes. Previously, she was a Vice President at Goldman Sachs & Co., where she created a communications system for the firm’s $20 billion institutional funds’ business. She can be reached at Dubick & Associates, Ltd.

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  1. It’s particularly interesting the point you make about Millenials not choosing the traditional linear path. It will definitely affect their financial planning, though I do wonder if they are any better at long term planning than previous generations who often start too late. But certainly from those who do have money, there is considerably more wealth available, especially in the tech industry. But as with everything now, in terms of networking and making connections, social media is the cornerstone.

    • Thanks for you comments. At this point I think it is too early to say if millennials will be any better at saving than their parents. On the one hand they may be seeing their parents work past retirement because they have not saved enough. On the other hand it is the millennial generation that gave us YOLO! (you only live once!)

  2. Libby, this is most interesting with the differences and how the financial advisors will need to adapt. I find much of what you say to be true, just communicating with my millennial nieces.

    I do think many people in all walks of life are moving to the new forms of communication so that alone will help in transitioning to working more with this large generation. And learning the numbers in this generation explains many things that are happening today.

    Thank you for this enlightening post, Libby.

    • Thanks Patricia, I think you are right about all of us moving to the new forms of communication, in many cases urged on by our millennials. .I’ve learned all kinds of ways to stay in touch with my daughter who lives overseas.

  3. Great post. I have one millennial in my home and can already see that this is going to be different than my generation. Thanks for sharing your results.

  4. Interesting. There are times I would align myself more as a Millennial given what’s noted in this post rather than as a member of Gen-X. A non-linear lifeline has always appealed to me 🙂

    • Thanks Jeri, I think there is always some blurring between the generations. I don’t think the idea of a non-linear life originated with the millennials, they just seem to be embracing it to a much greater degree.

  5. I totally agree with everything on this post. Being a millennial myself, I find myself going off that school->graduate->work path and I find that more and more of my friends would also rather start their own business or work from home (online) rather than the standard 9-5 office job. I think this kind of lifestyle will definitely have different financial needs and situations. Thanks for sharing this great post!

  6. I can totally see these changes coming. Even now you hear about millennials working awhile and then taking time off for a trip, going back to school, renting vs buying, etc. They are also marrying (or not) and having children later in life. Completely topsy-turvy to what we did.

    I do think that for the most part this has made them more confident (like young women traveling alone, unheard of when we were young) and more aware of what they want and determined to have a say in what happens in their lives. This does include advanced knowledge and use of social media and time-saving, financial apps.

  7. What you say is correct and is happening all around the world. In fact it has already started with people born before 1980. The stereotypes for what you do througout life is changing and we already find people taking university courses when they are pensioners and starting a new career late in life. Read in a business magazine that in the future insurance companies will most likely no longer exist because a new technique called blockchain will take over.

  8. Hi Libby,

    As a Millennial, the points addressed in your post resonated with me. Given economic hurdles among other things, embracing the non-linear lifestyle is expected. Financial stability is always on my mind, particularly staying on top of student loans. At the same time, living in the now mentality rings more true then ever because I don’t want my lifestyle to be weighed down by these obligations. When advisors can understand that, there’s a stronger incentive to work together in accomplishing common ground. Thanks for sharing.

    • Tatia — Student loans are among the most difficult challenges for millennials. Financial advisors can help to create a plan that balances their loan obligations with their other financial needs.

  9. When did I become my parents.
    All I have to say after reading this, “In my time, I had to earn what I got”.
    I just want to live long enough, to see how these millennial’s children will act. Wonder what they will do to make them go nuts.
    Thanks for sharing.

  10. Millennials are are so different than the previous generation it’s amazing. No matter what business you are in you have to learn how to deal with them. great advice in your post but they might not want to hear it.

    • Susan — hope that millennials will come to understand that the generations that came before them have knowledge to impart. Millennials don’t know everything!

  11. Like Jeri, I’m Gen X but definitely relate to many of these millennial characteristics. I’ve definitely had a non-linear existence and I’ve had so many different careers. And I still have many, many years left until retirement so I would say that my life is non-traditional.

    It is difficult to get a 20-year old to save for retirement. Nobody even mentioned that to me when I was in my 20s but I was also just barely getting by. But 20 year olds who take a more traditional route should at least have a 401K. And that is a great opportunity for a younger person to start saving early for retirement, even if they do nothing else.

    • Erica — A 401K will be essential to this generation as company-paid pensions are gone. That safety net won’t be there when you and the millennials reach retirement age. A lot of people will not have enough to retire, unfortunately.

  12. I suppose I am showing my age when I say I can’t imagine having a financial advisor who knows aboout my personal life and vice versa. When I was at the age that millenials are now, it would have been near imposible to sit me down to listen to financial advice.

    • Ken — How times have changed. When I was that age, I could barely make ends meet must less save. I didn’t need a financial plan. I needed to make more money!

  13. Interesting article, Libby. It does indeed require quite a different approach when communicating with Millennials. I think they are the generation with the widest range of choices, and they certainly seem to be less inhibited by challenges than previous generations. Thx for getting us thinking about it!

    • Doreen — sorry for the late response (as Libby has been away). No doubt Millennials are less inhibited in their choices. That’s because they’re more self-centered and want life on their terms. We in the preceding generations were more likely to toe the line.