2008, the year the financial world stopped being glamorous and suddenly became really…uh interesting. A decade of economic ups and downs (all normal and cyclical) combined with an abundance of vague regulatory standards and rapid technology disruption (not so normal), has taken the industry…particularly the wealth management space…for a transformative ride.
I am a millennial (a proud one).
I have investable assets (considered ‘affluent’ per most millennial study categorizations).
I do not have a financial advisor.
And I am not opposed to one…I do value advice.
But most advisors ignore my wealth (I guess money isn’t money).
The smart advisors don’t though…
So for those that do recognize wealth management is for everyone that has money (because money IS money), I thank you. But your road to getting Gen Y’s money isn’t so linear and you won’t be able to leverage your ‘patented’ process on most of us.
Related: A Financial Advisor’s Guide to Engaging Millennials
Here’s a different perspective of emerging lifestyles and behaviors of the next generation that will help you win them over (and it’s not limited to millennials…it just begins with us). Once you understand these concepts, the question is:
Are you and your firm prepared to handle these situations?
1. I don’t believe in predictable income
I have a 9-5 ‘stable’ job, but I know I need multiple sources of income. Most of my income will be inconsistent. That blog-life, the freelancing gigs, and tempting side hustles will be my constant and offer me more stability, but unfortunately, I won’t know exactly how much money comes in and goes out every month. Are you able to map out my goals and manage my priorities given the unsteady earnings?
2. I want to briefly live in Italy
And by ‘want’, I mean need and by ‘briefly’, I mean 1-5 years. I expect my advisor to know how much money I’d need to live (not survive) internationally given my habits, manage my domestic and global accounts, navigate through currency matters, ensure compliance (I’m assuming anti-laundering and other such policies will be reformed), and most importantly, be accessible. Are you certified to manage international accounts? Is your technology up to par to handle global transactions real-time? What’s your Skype ID?
3. Show me your thinking
Finance is math. In math, we were taught to always show our work to get the credit. So forget paper and pencil, but millennials will expect advisors to show their customized financial strategies through technology. Driving conversations with dynamic tech solutions should give me a glimpse into the advisor’s brain. Assuming companies are now developing or buying these capabilities, are you savvy enough to walk me through your models on an app? Why did you select certain securities over others and if you forgot to carry the 1, would we catch it in time?
4. Investing with purpose
We’re all driven by making money on our investments, but a new motivation has now been introduced…and this may throw advisors off. I need an investment strategy that generates a good ROI, but also serves a better purpose because I care about where my money goes. This idea of ‘impact investing’ requires immense research, restructuring product offerings, and encourages a different kind of thinking. Are you prepared to have this conversation and can your firm offer the purpose I want to be part of?
5. Can you introduce me to…
I understand the importance of human engagement, and so I’m quite social online and offline. Aside from expecting my advisor to be the same, I don’t want you to be surprised if I come to you and ask “do you know anyone that…” or “can you introduce me to…” Part of our relationship and your value, as opposed to the cool robo-advisor solutions, is your network. It’s your ability to connect me with others and kick off interactions that could potentially benefit me. This is the one advantage advisors have over their algorithm-powered competition. The technology will not be able to (at least in the near future) introduce me to a fellow Rutgers alumni who recently opened up a coffee shop in my neighborhood (I love when this kind of stuff happens!). So how strong is your network? Will they help you help me?
By 2020, millennials will control more than half of all investible assets, or about $30 trillion. In other words, this is the opportunity for wealth management firms…big or small, traditional or non-traditional. The time is now to nod to the millennials, welcome the most innocent money conversations, understand their lifestyles & behaviors , ramp up the technology based on their expectations, and start thinking through creative investment offerings (because they will want to be involved).
And Money Is Money.