The pandemic marks the second catastrophic financial downturn in the lives of the generation known as millennials or Gen Y. Many in Gen Y have cut short or delayed their dreams due to financial hardships caused by the market crash of 2008 and now find themselves on the frontlines of the latest economic downturn.
To dismiss millennials as a potential client base is short-sighted, however. Millennials have unique financial needs, and if you can address those needs, you’ll find a willing group of people ready to become clients and build wealth.
Here are five things to keep in mind when reaching out to millennials:
1. The struggle is real.
Millennials are still struggling with the after-effects of the 2008 recession. As such, some might be fearful or mistrustful of financial advisors. That’s not your target group. Other millennials have put financial goals to the side while dealing with the hard work of survival. There’s a hunger for financial education among millennials. If you make this part of your offering, you’ll have a leg up.
2. Millennials are strapped for time.
Many in Gen Y must work multiple jobs or have side jobs to make ends meet. Because they’re short on time, they appreciate meetings that are quick and to the point. Summaries and bullet points are your best friends when communicating with millennials.
3. Financial security is key.
Many millennials fear that they will work well into retirement. Investing is often an afterthought.
Millennials need other “safety net” financial services, such as life or even health insurance. Focus first on building security, and then guide them toward building wealth.
4. They value investing in the greater good.
While millennials want their money to work as hard as they do, they also are plugged into current events and making a difference. They are much more likely to invest in companies that practice corporate responsibility. Likewise, they are more likely to divest in companies they view as harmful to society or the environment.
Millennials don’t just want to make money, they also want to feel good about the companies they are invested in.
5. Millennials crave financial advice.
Despite the baked-in fear and mistrust that some millennials have of the financial sector, according to Investopedia, affluent millennials are more likely to hire a financial advisor. Millennials are also much more likely to deploy an investing strategy that uses a mix of robo-advisors and human financial professionals. Millennials are more likely than Gen X and Baby Boomers to say qualified advisors are trustworthy (81% of millennials vs. 73% of Gen X and 75% of Boomers), according to a February 2020 Harris poll.
So keeping up with the latest technology will give you another weapon in your arsenal when advising Gen Y. Personal connections are still key (and longed for) despite the fact that millennials live online.
Gen Y has a tenuous relationship to money, but those who are able to build wealth in hard times often seek out the guidance of financial advisors. That guidance will be more important than ever in the uncertain financial landscape of 2020.
For more about millennial clients
- Read “Working with millennials: Stereotypes vs. reality”
- Watch “How to talk to millennials about insurance”