However, while there are real differences between generations, there are equally strong similarities too. Like previous generations, millennials and Gen Z want to achieve similar goals including financial independence. Deloitte found that 74% of millennials and 65% of Gen Z actively budget, and a majority have clear financial goals for the next five years. In response to the pandemic, close to a fifth of millennials started saving more. Contrary to the stereotype, millennials and Gen Z are five times more likely to trust a certified financial professional than a robo-advisor and believe that an advisor is easier and less intimidating than a robo-advisor to use.
For the financial services industry and financial advisors, I believe there are three areas that they should focus on to better cater to millennials and Gen Z. The first focus area is building trust. By delivering on promises and being transparent, companies and advisors can reduce skepticism and build trust over time.
The second focus area must be technology. Millennials and Gen Z expect better, more seamless, and more intuitive digital experiences. You can’t continue to offer Blockbuster-like services to people who are used to Netflix. Particularly for advisors, better technology will allow them to spend less time on low-value tasks and spend more time on the things that matter, like strengthening existing relationships or reaching out to new clients.
The final focus area is personalization. Millennials and Gen Z won’t accept the same one-size-fits-all portfolios of the past. Their demands for more personalization will further accelerate the unbundling of financial advice and products. New technologies enable advisors to create personalized portfolios at-scale, ensuring there is no trade-off between customization and growing a business.
Appealing to and gaining the trust of millennials and Gen Z is not an easy task, but it’s the only way companies and advisors can deliver better services and ultimately better outcomes for new clients.
Samir Vasavada is the CEO and co-founder of Vise.