Serving younger clients can help advisory businesses stay ahead of cultural and technological change, which ends up benefitting all of a firm’s clientele in the long run, she says.
2. Millennials Are Underserved
Millennials are a generational frontier for most of the financial services industry, but especially for advisors, she says. According to SEI’s survey, 74 percent of millennials do not have an advisor.
“There’s a lot of competition out there for traditional clients, but millennials are out there accumulating assets absent financial advice,” says Pohlig. “They want advice, but they don’t always want it now, and they don’t always want continuous financial planning. By the time they reach the age when they want continuous advice, if they’re not being served by advisors, they’ll have found a different channel and the opportunity will be gone.”
At the same time, millennials are demanding in-person financial advice—only 10 percent of the millennials in SEI’s study said that they would never seek out professional financial advice. SEI recommends that advisors offer planning around early-to-mid-life events, like marriages, child birth or homebuying, in order to meet the needs of a relatively untapped pool of quality clients.
3. Millennials Are Many Of Your Clients’ Heirs
Millennials will be recipients of the largest wealth transfer in human history, which SEI pegs at around $30 trillion. Millennials are going to demand a lot of advice to help them manage those inheritances.
“If advisors don’t reach out to these heirs, they’re going to take their inherited assets and go elsewhere,” says Pohlig. “Advisors need to make sure that the first time they talk to a millennial heir is well before the elder client passes on.”
Advisors with baby boomer clients are well positioned to serve their clients' adult children with advice now, before a wealth transfer takes place, and doing so might be the key to retaining assets after an elder client dies, she says.
4. Millennials Will Become Your Best Clients