Providing Financial Services to Millennials (Who Aren't Interested)

Providing Financial Services to Millennials (Who Aren't Interested)

The American College of Financial Services
April 1, 2016

For financial advisors, millennials are a great paradox. They’re a growing financial and cultural force but are notoriously difficult to secure as clients. After all, they feel simultaneously young and invulnerable and (relatively) too poor to worry about growing investments. Fortunately, there are three relevant and enticing concepts you can discuss to secure millennial clients and convince them of their need for a financial advisor.


Retire On Time and Don't Delay Happily Ever After

One of the best ways to provide financial services to disinterested millennials is to point out long-term financial realities vs. short-term financial fantasies. As Millennial Money notes, many in this generation focus too much on emergency funds, and they are starting to notice that these funds could have accumulated much more rapidly if they had been invested accordingly.

This provides an opportunity to persuade millennials that more long-term planning is in order. Specifically, millennials may express worry that educational expenses (especially those associated with continued education via advanced degrees) will force them to delay their retirement plans.

Convincing millennials that focusing on wise investments and financial planning now will ensure that they won’t have to delay their "happily ever after" future because of student loans (or other debts they're facing). Moreover, developing a solid investment plan will help them to eventually surpass the costs of student loans, giving them an opportunity to invest now and actually pay off the dreaded loans that much sooner.

Gain Realistic Expectations

Additional research by Plan Sponsor discovered that 60% of millennials say their number one financial goal is their mortgage. This may explain a certain bleak reality: Work 911 notes that 77% of millennials have had difficulty making mortgage payments, very close in number to the 76% that have had difficulty making car payments. What, exactly, is causing this? The likeliest explanation is that the desire for large homes and fancier automobiles as social status symbols has caused millennials to financially overreach for things they can't quite afford.

This represents an opportunity to convince millennials of the need to have a regular financial advisor. In addition to providing raw data that the buyer doesn’t have easy access to, the advisor can outline how a major purchase fits into the long-term financial future of the buyer. Advisors can also explain whether current market trends make home purchasing a wise option at the present time.

Protect Family Assets

One of the most persistent difficulties in selling financial services to millennials is, bluntly put, their age. That is, younger individuals who have just entered the workforce and started accumulating assets have trouble imagining the need for some of the long-term financial advice mentioned above.

However, according to Investopedia, life insurance can serve as a great way to attract millennial clients.  This generation is in a prime age range to get married and have children, which naturally makes them more concerned about securing the financial prosperity of their spouse and/or child if the millennial should pass away. This is the seed of a relationship that will only grow, with the millennial learning to trust the advice of their financial advisor who can later offer advice on more financial decisions, such as starting a college fund for their children or buying a larger house.