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7 Things Millennials and Gen Z Want From Financial Professionals

If you’ve built a successful financial advisory practice, you can attest to the fact that it takes hard work and dedication to continue to pursue growth. When you study what contributes to lasting success in the financial services industry, you’ll find the common denominator is the ability to adapt and embrace change.

It’s the one constant, whether you’re talking about shifting markets, technological advances, or today’s volatile regulatory environment. What about your clientele? How can you embrace and adapt to the generational shift happening in our time? Perhaps this is the greatest obstacle to growth, as many practices were built by focusing on acquiring and serving wealthy baby boomers.

As more and more boomers have entered retirement or passed on, the focus has now shifted to millennials and even Gen Z. This begs the question: “Is your advisory firm still positioned for success?”

Have you figured out how to become relatable, valuable, and even indispensable to younger generations including Gen X, millennials, and even the up-and-coming Gen Z? Like any solid business strategy, forward-thinking is required. The future of your practice depends on it.

group of friends hanging out in a cafe

Understanding Young Adults

If you’ve spent much of your practice meeting with the over-60 crowd you may be feeling mystified by these generations. You’re not alone. Standing in stark contrast to the generations before, young adults have a radically different set of wants, needs, and values. Many millennials, which now have surpassed boomers as the largest group of consumers, are building families, buying their first homes, or trying to find innovative ways to position themselves for financial success and independence. One marked characteristic of this generation, however, is resilience.

Many millennials graduated college only to be met with the Great Recession. Add the erasure of wealth and overall uncertainty caused by 9/11, rising inflation, a hot (but cost-prohibitive) real estate market, and low wages, and it’s easy to see why this audience hasn’t been a traditionally lucrative target market for advisory practices. (Substantial assets to invest = greater profitability for your firm.)

Millennials now comprise the majority of the workforce, now reaching the height of their careers between the ages of 25 and 40. They can no longer be overlooked as they begin to not only acquire their own wealth, but they also stand to inherit roughly 68 trillion from boomers.

68 trillion.

If your firm wants a slice of this staggering generational wealth, it is important to cultivate relationships with the next generation. Not to mention, this is the key to solidifying the long-term success of your firm’s future.

The best part is that millennials are ready to meet with an advisor. There was a time when they didn’t have much interest, but their attitude has since collectively shifted. One Nationwide survey concluded that 75% of millennials wanted to work with an advisor to reach their goals.

It’s clear that millennials are a valuable market for your advisory practice, and the opportunity is right there waiting for you.

To position your firm for success, practical adaptation is the place to start. If you’re looking to attract and retain young adults as a part of your strategic business plan, here’s what you need to know about what millennials and Gen Z are looking for in a relationship with a financial advisor.

  1. Find unique ways to solve challenges.

    One thing is for sure: millennials and Gen Z require a different approach. Consider adopting nontraditional methods and using technology to meet millennials where they are, paying heed to the fact that they may not meet the same milestones as your other clients. Take the time to consider their unique circumstances and how their financial planning needs differ from generations prior. Their financial goals may be drastically different, so it’s vital to understand and define their financial aspirations to set a solid foundation for a long-term relationship.

    Speaking of technology, millennials and Gen Z have grown up with smartphones in their hands. How can your use of technology specifically help solve their challenges and make life easier? How can technology help them reach their financial goals? Find ways to tie your value to technology, and don’t be afraid! Young adults are used to doing business online (buying cars, paying bills, etc.) and they expect it.

  2. Recognize millennials are short on time, and they’re acutely aware.

    It’s not that millennials don’t want to invest. Starting a career in the middle of one of the worst economic recessions in decades left many millennials overqualified and underpaid for their work. Graduating in the midst of a recession can account for nearly 10% in annual earnings losses during roughly the first 10 years of one’s career.

    They may not have substantial investable assets yet, but they are interested in building a financial cushion to feel more confident about the future. They’re looking to you for the practical steps to get to where they want to be. Fortunately, many have turned the corner and are experiencing notable earnings growth. Combined with the aforementioned inheritance potential, their investable assets can be sizable.

    Consider adding a service offering to your practice that is geared towards those with earning potential or those who are building wealth for the very first time.

  3. Place an emphasis on education.

    Every generation has a segment of Do-It-Yourself (DIY) consumers, and millennials are no exception. Perhaps out of necessity, millennials have learned how to do a lot of things themselves, (we’re looking at you, YouTube and Google.) Managing their finances is no different.

    They’re interested in learning, and they see tremendous value from getting advice in a way they can understand. Put aside the financial jargon and lean heavily into education. Develop and provide resources, expertise, and perspective, all while taking the time to answer questions with authenticity. Prove your value to millennials by showing them how you can help manage their finances in a better way than they could themselves.

    Your millennial clients will see you as a trustworthy source for their financial well-being, and that’s just what they’re looking for.

  4. Get rid of “bad debt” and build “good debt.”

    It’s no secret that student loans have stymied the financial growth of younger generations. While many are saddled with debt, many millennials desire to purchase a home or build equity through real estate.

    Nearly 53% of all new home purchases were made by millennials in 2020. If buying a home is a priority (which it likely is), they need to figure out a way to reconcile their finances to stay on track to reach this milestone (or another one) while planning for student loans. It may seem elementary, but opening the door for a conversation about student debt could be the thing that sets you apart from another advisor.

  5. Make practical financial decisions.

    As young adults climb the corporate ladder, their salaries increase along with their earning potential. Where they need insight is how they can utilize their additional funds and strike a balance between an increased standard of living while remaining well prepared for whatever happens in the future. Today’s institutions, big or small, offer financial services for millennials, which are usually focused on financial wellness, education, and access to investing.

    Can they afford a luxurious vacation? What kind of car would be the best purchase? They need an expert’s perspective to help them make these kinds of practical financial decisions. Be available and responsive for practical discussions.

  6. Understand investment trends.

    Crypto? Meme stocks? ESG? Millennials and Gen Z want to understand trendy investment strategies like cryptocurrency or NFTs, and get in on the fun if they can. Socially responsible investing may not be a trend in the same sense, but it’s likely going to be part of the investment conversation with young adults.

    FOMO (Fear Of Missing Out) is a real phenomenon, so ensuring you’re well versed in the latest trends can help reinforce your reputation as a trusted source. You may want to consider expanding your team’s knowledge base to cover up-and-coming trends.

  7. Know when retirement is on the horizon.

    Many baby boomers aimed for the magic retirement age of 65, but millennials are different. One money manager’s survey revealed that almost half of millennials are planning to retire earlier than expected, perhaps even before the age of 60. Find out when retirement is expected and build a customized plan accordingly.

    Shifting your practice’s focus to younger generations is critical for your future success. It starts with adapting your prospecting methods to strategically attract millennials and Gen Z. With the proper intel on millennials and Gen Z you’ll build relationships with qualified prospects and quickly turn them into clients.