How Millennials Think About Investing

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2 min
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April 6, 2021

Millennials are now the largest generation and their earnings have started to increase. They are climbing corporate ladders, receiving inheritances and becoming profitable clients for financial advisors. From a wealth planning perspective, they present opportunities for advisors to add value during life events such as having children, buying houses and starting or inheriting businesses. 

As an advisor, you may already have some millennials in your client base, perhaps as children of your high net worth clients. If you have segmented your clients, these millennials probably fall into a lower tier. However, if approached systematically, this client base can be profitable both now and potentially even more so in the future. If you want to keep the parents’ assets in your book when their wealth is transferred to the next generation, you need to appeal to their children now to ensure their loyalty later.

So how does the millennial generation think when it comes to investing and financial advice? Investopedia recently completed a study and the findings may surprise you.

Millennials aren’t confident in their investment knowledge.

The majority of their financial knowledge is based on how their parents manage their money and they just aren’t confident in their parents abilities.

Millennials aren’t only about DIY (do it yourself).

They may go to YouTube to learn key concepts and skills but, when it comes to money, they do value the opinion of an expert. According to the study, 43% of affluent millennials have a financial advisor. Robo-advisors have been trying to attract millennials with a smaller net worth and simply don’t provide the holistic wealth planning advice that they know they need.

They are generally more conservative investors.

Millennials have now had to deal with two recessions before the age of 40. Most millennials were trying to start their careers during the Great Recession and also saw their parents losses in their portfolios at that time. They also have more student debt and fewer assets than previous generations had at their age. All these factors combined have resulted in Millennials being more aware of risk and therefore, more likely to be risk averse.

Their communication style is more digital.

They would rather communicate via text or messenger than on a call. Hosting a webinar where you are discussing a wealth planning opportunity that's relatable may be better than trying to schedule an in-person meeting. When it comes to scheduling a meeting, having an online booking system is an easy way to appeal to this generation. Communicating digitally is much more time-efficient for both you and the client.

Overall, millennials can be good clients for financial advisors and should be considered seriously in your business development and client management processes. Get started on your millennial clients today. Make sure you have digital content to support your offering and ensure you are leveraging your time correctly.

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Emily Reed
CEO and Co-Founder of HeyAdvisor, CIM
Emily is a CIM and a millennial with over 10 years experience in the financial industry. For over 8 years, she has also been working closely with advisors to help them create a more systematized business with a focus on attracting and retaining their ideal clients.

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