How monetary advisors can entice millennial purchasers


Millennials will inherit a whopping $ 68 trillion from the baby boom generation.

But they don’t necessarily look to their parents for guidance on how to manage their money.

The proliferation of online money management platforms has given millennials more opportunities than their parents once had.

Many choose to go it alone, according to a recent survey by the National Association of Personal Financial Advisors that found that 62% of Millennials get their advice online or through social media. Only 21% said they primarily consult a financial advisor.

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However, according to experts speaking at the CNBC Financial Advisor Summit Wednesday, there is still room for advisors to build relationships with this younger group.

The Millennial generation survived September 11, the Great Recession and now the Covid-19 pandemic, which left 38% of them less optimistic, said Kristi Rodriguez, senior vice president of the Nationwide Retirement Institute, citing a recent one survey carried out by the company.

This changes their willingness to work with a consultant. In 2016, fewer than 50% of Nationwide Millennials surveyed said they saw the need to hire a professional. In 2020, over 75% said they wanted to work with a counselor to minimize risk and plan retirement, Rodriguez said.

While it has become a joke that millennials killed certain industries, it isn’t the case with financial advisory, said Jon Mauney, general manager at Betterment.

“I don’t think millennials killed or are killing financial advisors,” Mauney said.

However, in order to attract younger investors between the ages of 25 and 40, the advisors have to approach them differently than their parents.

Offering a more flexible approach with a price list rather than a flat percentage of assets under management fee structure tends to appeal to this younger generation, Mauney said.

Rodriguez also says that making millennials feel like their advisors are trying to see the world from their perspective is very helpful with millennials.

“They want you to really understand their ‘why’,” said Rodriguez.

Millennials also prefer to see diversity in advisory teams in terms of age, ethnicity, and socioeconomic background, she said.

The good news for financial advisors is that introducing this younger generation may already be possible through their Boomer clients.

“Say, bring your millennial, let’s have a fuller conversation, and bring them along,” said Rodriguez.

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