Qualitative research shows millennials learn philanthropic lessons from their parents or grandparents, and the research shows that 69 percent of millennials will source their financial advisors through a personal network of family and friends, and another 44 percent will leverage their network of professional colleagues.
“Advisors should engage the younger generation by offering them education,” Dane says. ”Teaching broader financial topics or even basic financial literacy can be a great entry point. Talk to existing clients and ask them to let you help get their kids ready for a wealth transfer.”
Millennials tend to have a more conservative outlook on investing than previous generations, according to the study. They are most concerned with protecting their family legacy, preserving family wealth or growing their family wealth.
“Advisors are well equipped to help millennials with protecting or growing family wealth,” says Dane. “Preserving and perpetuating family legacy is more difficult because it involves behavioral choice and aligning values and takes an extended process of discovery.”
The study showed that 75 percent of millennials intend to dedicate at least half of their inheritance to their own next generation, whether they had children or not.
Generation Y is also seeking advice to help with wealth transfer — in fact, the study found that 90 percent of millennials value assistance with wealth transfer, more than any other type of advice, an issue that the financial industry has a poor track record of dealing with, says Dane.
“Many in the wealth community are accustomed to serving the present holders of the wealth, so their infrastructure and organization is oriented towards serving a more experienced client,” Dane says. “You’re now going to have less experienced clients that think of the world a little differently. You need to prepare your team and environment to engage this client.”