How Wealth Managers Can Work With the Next Generation of Millennials

Our industry has been talking about the impending “great wealth transfer,” as millennials and post-millennial Generation Z adults get ready to inherit wealth from their Generation X parents and Baby Boomer grandparents. This gives us in the financial and wealth management business pause — especially when we read reports that suggest these younger generations lack the brand loyalty that their older relatives have.

The generation of Americans born between 1981 and 1996 — millennials — represents about 22% of the U.S. population, according to data from the U.S. Census Bureau. As their Generation X parents and Baby Boomer grandparents age and pass along wealth — and as millennials’ earning power grows as they mature — investment management firms need to seek ways to meet the needs of this generation.

Population in the U.S. by generation

Generation Born% of U.S. PopulationGeneration Z1997 and later27.68%Millennial Generation1981-199622.03%Generation X1965-198020%Baby Boomer Generation1946-196422.18%Silent Generation1928-19457.47%Greatest Generationbefore 1928.64%

Source: U.S. Census Bureau via Statista

Are You Ready for the Great Wealth Transfer?

Financial industry researchers have been saying this for at least 10 years:  Don’t assume that just because you have served a family for many years, you’re guaranteed to retain their children and grandchildren as clients. In one survey by Cerulli (as reported by of affluent investors, researchers found that 87% of investors didn’t use their parents’ advisors and 88% of them said the thought never even occurred to them. 

Did you catch that? The vast majority of younger investors said they’d never even considered to work with their parents’ financial advisors. That’s your cue. If you want to inherit future generations’ business, you need to establish relationships with your clients’ beneficiaries. And once you do, be prepared to work hard to retain their business.

4 Tips for Working With Millennial Clients

If you’ve followed our advice for wealth managers and how they can attract millennial clients, you know how important it is to establish relationships with younger generations now, while their parents and grandparents are current clients. 

1. Ask to meet them.

Ask for an introduction to meet the beneficiaries of your clients. You might hesitate to do this because you feel like you’re intruding on their private lives. You’re not intruding. You wouldn’t be doing your job if you didn’t reach out and meet the people who are in line to inherit the assets that you and your client have been thoughtfully and carefully building for their children and grandchildren. Let them know you want to meet the family so you can successfully transfer wealth when the time comes. 

2. Host family meetings.

Invite your families to getting-to-know-you dinners or coffees. If the parents and grandparents are reluctant to reveal financial details with their younger generations, keep your discussions light and on broader educational-type topics. Use the opportunity to invite the younger family members to ask you questions about their own investments — are they thinking about their own retirements? What are they saving for? What are their dreams for their own families, and how can you help them make those dreams come true?

3. Talk about your values.

Younger generations care deeply about philanthropic and social topics. They like to do business with companies that give back to communities and support charitable organizations. Share that information with all of your clients through a monthly newsletter and a special section of your website that is devoted to your community involvement. Share your stories of giving back through your social media channels (especially through Instagram, which tends to skew toward millennials).

4. Hire young people.

Show your younger clientele that you are committed to their generation by employing young people. In a related post, we talked about why millennial workers pose challenges for the financial services industry. Culture matters to millennials. They want to work with companies that understand and respect them. 

Perhaps more important than these four “soft” tactics for attracting, catering to and retaining a younger demographic is the “hard” tactic of meeting their demands for 24/7 connectivity, data and DIY financial management. 

Adopt Fintech That Millennials Demand

The millennial and post-millennial generations are connected 24/7 through their smartphones, tablets and home, school and work computers. Heck, what generation isn’t connected 24/7? With constant connectivity comes the demand for 24/7 access to investors’ financial information.  

Sometimes we think of the millennial generation as the DIY generation — they are “digital natives” who tend to be more technologically savvy than older generations, who have historically been comfortable as the DIFM generation of investors (do-it-for-me). As older generations become more comfortable with technology, and as younger generations come into their own financially, financial firms will have to adopt the fintech in demand or be left behind.

Automation technology benefits your business too. We have seen study after study, as well as our own clients’ case studies, that illustrate that when financial firms adopt more efficient technology, they save money. 

In fact, financial firms that adopt cloud-based turnkey asset management platforms (TAMP) to replace their client-server software report high levels of satisfaction with the migration to digital. They say the automated platforms allow them to grow their businesses, spend less time on investment-related activities and more time on client-relation activities, and attract new clients in new segments. 

You can read more about the benefits of fintech in our ebook, “Why Move from Client-Server Portfolio Acounting Software to a TAMP.”

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