Published February 28, 2018
Millennials are not exactly the target investor financial firms desire; they don’t seem to fit the profile of wealth. The word “Millennial” is nearly synonymous with student debt and lower incomes. Born between 1980 and the year 2000, this generation has faced higher unemployment rates and consequently is more likely to continue living at home into their mid-20s. Marriage, children, and home purchases are occurring later in life.
But Millennials are about to take over as the most significant financial generation in America. They’ve faced difficult financial situations, but their resiliency is admirable. The majority of Millennials have plans to marry, have children, and buy homes. If your financial firm isn’t targeting Millennials, you could be missing out on an incredible opportunity as more than 90 million individuals reach their prime working, inheriting, and spending years.
Why Include Millennials as a Target Demographic for your Firm
The generational shift will take place over the next five years. Millennials are working their way up the corporate ladder to be tomorrow’s professionals and executives. They will move out on their own and buy real estate. Many of them will also inherit tremendous wealth from the Baby Boomer generation. When they are ready to receive financial advice and assistance, to whom will they turn? They’re going to look for a firm that can deliver; one that aligns with their values. Millennials are truly the client of the future and your financial firm needs to be prepared to serve them.
By the year 2025, Millennials will make up more than 75% of the workforce and account for nearly half of the nation’s income. The volume is staggering and puts this generation in a position to surpass all others in terms of spending power and income. If your advisory firm isn’t uniquely positioned to serve them, you’ll likely miss out on significant revenue and growth. Millennials will take over as the main economic source of wealth and consumer spending over the next five years.
Don’t wait; begin to position your firm now with a plan. Just as diversification is an effective strategy for building a portfolio, it’s also how you should look at your book of business. The classic case of “all your eggs in one basket” is a risk you can’t afford to take. A younger client base means you’ll deal with fewer life-altering events. You’ll also have the opportunity to cross-sell other products like life or disability insurance.
Think about the future benefits: while a Millennial investor may not have significant wealth to invest today, a light-touch client now could become much more valuable as they accrue wealth 10 and 20 years down the road.
How to Attract the Younger Generation
Think like a Millennial. They’ve grown up with the Internet at their fingertips and their world never shuts down. They are connected 24/7. Millennials value influence, authority, and transparency. The old ways of marketing aren’t going to cut it for this group. Because they’re a social generation, the opinions of their peers matter most. Cold calling as a sales strategy combined with a lackluster online presence is a surefire way to take your firm out of the running. Spend time cultivating your brand and centers of influence. What does that mean? Be someone they can trust: both in person and online. Give them advice that’s applicable. Answer the questions they’re most likely to encounter. Most important of all – cultivate relationships that their peers will want to talk about and recommend. Your digital strategy is essential and it must be cohesive across all platforms. Millennials will absolutely look up your firm on social media before they contact you. Make sure it is clear who you are, that your brand projects innovation. Technology is a tool you can use to your advantage. Of course, if you want to reach Millennials…hire them! A few junior advisors for your firm could bring valuable input to help frame the conversation.
Millennials may not be the perfect client for your firm, but it’s important to consider the impact they could have. If Millennials are a priority for you, be sure your digital strategy is aligned. If you have questions about building your advisory business, find out how Private Advisor Group can help!