Connecting with Millennials
So we have heard a lot about millennials over the past few years, but who exactly are they? By definition they are anyone born between 1980 and 2000, and they represent the largest generation in history. They comprise one quarter of the U.S. population, and by the year 2020, will make up 50 percent of the American workforce.
An opportunity for advisors
Over the next several decades, the baby boomer generation, the largest and wealthiest in history, will transfer over $50 trillion from their generation to the next. Nearly half of millennials do not work with an adviser to manage their finances. By NOT understanding them, finding ways to be relevant or engaging with them or adapting to their expectations, you will lose out on many opportunities. But if you can adapt and respond to these changes you will have a distinct advantage.
Understanding Millennials
Baby boomers often mistakenly believe it’s difficult to connect with millennials. But it’s actually straightforward — if you have a good understanding of who they are as a generation. So how do you position yourself to be relevant? You first need to know your audience. In the case of millennials, look at what sets them apart from other generations and what you can do to make yourself marketable.
Millennials tend to:
- Leverage technology
- Prefer collaboration
- Be socially accepting
- Place an emphasis on giving and receiving value
- Be more conservative and less trusting of advisors than previous generations.
- Have greater access to social networks and online tools to use in making decisions
Five trends driving the way millennials approach financial advice:
- Advisor perception
A recent report shows a third of millennials would only commit to one 15-minute meeting with a financial advisor. Before you pass judgment, take a moment to consider why they might think this way. They assume an advisor is going to educate them about financial products, how to save and how to pay down debt. From a millennial’s standpoint, all of that information can be found online. The logic may be flawed, but it makes sense to millennials, and it is a perception an advisor will need to overcome.
- Different perspective of the stock market
Millennials lived through the same recession as their parents and grandparents but emerged from it quite differently. Older generations view the market as a safe and reliable place to invest, but the first impression many millennials have of the stock market is the recession. So it is not surprising that they are skeptical about its safety and reliability.
- Desire for personal advice
When it comes to seeking financial advice, Millennials are more than twice as likely to ask their parents as they are professional advisors. Financial empowerment begins with financial education, so providing them with valuable content is extremely important.
- Create an online persona
Traditionally, advisors have got to know their clients professionally first and then moved to a personal relationship. Millennials have flipped the script. They want to know you before meeting you. Don’t be surprised when millennial prospects know quite a bit about you before becoming a client. By the time they contact you, they may have already done research on you using their social networks and other online tools. You should make it easy for them to get to know you. Therefore, your practice needs a social media and online presence.
- Educational resources
Millennials were raised with computers, the internet and cellphones. This upbringing significantly changed how they make decisions, receive information and interact with people. Millennials want immediate access to educational resources. By having an educational presence online – a website, blog, video, social media, newsletter — you can better answer their questions while gaining their trust.
Contact Iron Point for a no-obligation coaching call on connecting with Millennials.