Forget about HENRY. Have you met MARG, CHIP and DREW?
Advisors who desire millennial clients probably don’t want their firm to serve just anyone between the ages of 21 and 35, yet they may not understand what kind of millennial archetypes are best for them, according to Oaks, Pa.-based SEI.
“HENRYs” is the tag for millennial clients who are “high earners, not rich yet.” Many advisors say they’re eager to serve this group, says Missy Pohlig, SEI’s director of next-gen services, because the cheeky acronym seems to describe young people who will eventually join the emerging affluent or wealthy.
However, “We think that ‘HENRYs’ is too vast,” Pohlig says. “We want to be more specific about who we think that advisors should target and how they can work with them. What are their behaviors? How do we engage with them? ‘HENRY’ only looks at age and income, but it doesn’t get to other aspects that make millennials who they are financially—like assets, net worth and debt.”
Opportunity certainly exists for advisors: According to the U.S. Census, there are 93 million U.S. millennials. A Fidelity study released earlier this year estimated that 62 percent of millennials have already opened an investing account. A subsequent TIAA study found that some 82 percent of millennials were interested in receiving professional financial advice, but only 45 percent had done so at the time of the survey.
Pohlig believes that advisors should think more deeply about the young clients they wish to serve, identify millennial challenges that they would like to face down, and find niches that best suit their practices.
"You may want to segment them," she says. "If you want to cut through the noise on social media and all the marketing trying to capture millennials' attention, you have to be topical and specific, even personal if possible."
In a recently published e-book, “Beyond The Typical Millennial Research,” Pohlig, who is herself a 20-something, breaks out three new millennial archetypes advisors might want to familiarize themselves with: MARGs, CHIPs and DREWs.
MARG
MARGs, or “mom-assisted recent grads,” might not be great candidates for financial planning right now, notes Pohlig. They might be three to five years into a professional career and pull down approximately $75,000 in annual income. But they are hampered by moderate levels of debt, and tend to rely on friends and family for help with their financial issues.