High-net-worth millennials, who are just coming into their own financially, need and want guidance for the next chapter of their lives, according to a survey by RBC Wealth Management.
Millennials in the U.S., those 25 to 40 years of age, increased their wealth from $4 trillion in 2019 to $9 trillion at the end of 2021, according to the Federal Reserve. They are looking for advisors to help them manage their newly-earned money, RBC Wealth Management said.
Advisors should make themselves known in the community to attract some of the business from this generation, which is now the largest in the U.S., having surpassed baby boomer, said Angie O’Leary, head of wealth planning at RBC Wealth Management.
“These are the children of our current clients. They have shown they are more open to being influenced by friends and family and to recommendations from them than previous generations,” O’Leary said in an interview. “They are seeking more financial education. For instance, many of them have stock options but they are not sure how to handle them—an advisor can help. Millennials’ financial lives have reached a level of complexity where they want guidance.”
Eighty-four percent of millennials frequently think about their financial security., according to the survey. At the same time they report having a high degree of trust in financial advisors. They “have lived through substantial financial turmoil and witnessed their parents struggle through the financial crisis [and] they recognize the value of professional advice,” the survey report said. The survey included 750 25- to 40-year-olds with at least $1 million in investable assets, and 250 with an income of at least $250,000 and between $100,000 and $999,000 investable assets.
According to the survey, almost six out of 10 millennials said they have difficulty finding time to manage their finances while juggling multiple responsibilities, and nearly three-quarters said that after paying off debt, saving for an emergency fund, and maxing out their 401(k), they are unsure what to do next.
The main goal of those surveyed is establishing long-term security by investing and saving. Thirty-eight percent said investing in the stock market is their top financial goal, compared to 33% who said prioritizing saving for retirement was their top goal.
“Millennials have an entrepreneurial bent. They want to retire early and many want to start a business,” O’Leary said. More than one-quarter said their top financial goal is starting a company. “They want to create other sources of income through business ownership, investment property or a side-hustle. Competing responsibilities and goals make a personalized wealth plan especially important for millennials, with a focus not necessarily on retirement planning, but instead on planning for their specific life goals.”
O’Leary said RBC Wealth Management was surprised by the degree to which environmental, social and corporate governance issues mattered to this generation. Eighty-five percent of survey respondents said it's important to consider ESG data as part of their investment decisions and that these investments are an integral part of their investment strategy, and eight out of 10 said they would leave a financial advisor if they were not knowledgeable about ESG.
“To reach those goals, millennials are searching for financial advisors with knowledge about ESG,” the survey said.