The millennials are coming. In fact, they’re already here, which provides financial services firms with potentially huge opportunities––and challenges––as they try to reach this generational group.

According to a report from New York City-based financial services research company Corporate Insight, the financial crash and slow economy recovery have left negative impressions on millennials and made them skeptical about financial institutions––particularly big banks and those firms commonly associated with Wall Street.

As a result, the financial services industry, including financial advisors, will need to think differently when it comes to serving this cohort.

Millennials, or Generation Y, are typically defined as people born after 1980 and through the early 1990s (though the dates can vary). They’re roughly 80 million-strong and will become a greater economic force as their incomes grow and the fortunate ones inherit money from their baby boomer parents. And, of course, they’re quite different from their elders on many fronts ranging from their use of technology and their social and cultural attitudes to how they view financial products and how they invest.

As spelled out in the report, The Millennial Shift, Financial Services and the Digital Generation, young adults who are ladened with student loans and laboring in states of under-employment are more focused on making ends meet than investing in the financial markets. As such, cash flow management, budgeting needs and meeting overall financial goals are more important to them than finding the hot stock du jour.

And those Gen Y’ers with money view the schizophrenic volatility of the markets with caution and are very conservative with their money. Probably too conservative given their time horizon, because now is the time for them to start investing money and taking advantage of the power of compounding.

Corporate Insight’s research found that many millennials don’t feel prepared to manage their finances and make their own investment decisions, and are looking for trusted sources of financial education. And that’s where financial advisors can play a role.

“There’s a great opportunity for advisors to coach millennials from a position of risk aversion to one of risk awareness,” Alex Filiaci, senior analyst at Corporate Insight, said in an interview. “It’s a great opportunity to educate millennials on the merits of the markets and to explain the risk of each type of investment and how they fit into their time horizon.”

Gen Y represents the next wave of clients, but advisors shouldn’t assume that millennial children of their baby boomer clients will automatically become their clients, too. The Corporate Insight report notes that advisors should actively cultivate relationships with millennial children now to improve the odds they’ll stick around during the intergenerational wealth transfer.

And if they do stick around, advisors should be prepared for a different type of client engagement that’s less about personal face time and more about interacting via phone, email or video chat. And advisors who want to serve millennials will need to embrace social media when it comes to marketing and investor education.

If anything, millennial attitudes about investment returns and goals-based planning could be right up the alley of advisors who are more focused on the planning side than on the investment side. "Millennials will likely be less focused on beating the market than earlier generations and more interested in planning for and meeting their financial goals, an attitude advisors should welcome,” the report says.

Among other conclusions from the report:

• “Hybrid” brokerages offering guidance and cheap online trades are an appealing value proposition to millennials.

• From a product standpoint, investment firms could win more debt‐burdened millennial clients by lowering the minimum amount needed to open a managed account and cutting fees on planning services and other forms of advice.

• Next‐generation investing start‐ups with low fees and low account minimums pose a competitive threat to the established industry.