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Millennial Investors Crave Connection ... and Gifts

Technology and family drive young investors’ advisory decisions, but gifts are still very much appreciated.

Far from the stereotype of oblivious twenty-somethings staring at their phones with headphones on, millennials actually crave real-world connections.

A new Spectrem Group research report, Millennial and Generation X Investors,which surveyed 200 millennial and 200 Gen X investors with a net worth (not including primary residence) between $100,000 and $25 million, casts some light on what advisors should know about the relationship networks of millennials. 

For starters, they’re going to inherit wealth. Over two-thirds (67 percent) of ultra-high-net-worth investors ($5 to $25 million) say inheritance and family connections are the major drivers of their personal wealth. As these investors age, they are even more likely to benefit, as older family members pass away.

Millennial investors are also much more likely than older generations to make joint financial decisions with their spouses. Nearly three-quarters of millennial investors (71 percent) say they do so, far outpacing even their closest competitors in Gen X (63 percent). Just over half of baby boomers (54 percent) and World War II investors (53 percent) say they make joint financial decisions with their partners.

Millennial investors are significantly more likely than other generations to favor texting or instant messaging to communicate with their advisors, as opposed to email or phone calls. More than two-thirds (68 percent) of millennial investors report they would be more comfortable texting their advisor, far higher than the 32 percent of Gen X investors who say the same. Their comfort with mobile apps extends beyond communication; 58 percent of millennials use some type of payment app, compared to 16 percent of Gen X investors, with Venmo by far the most popular; it’s used by nearly half of all surveyed millennials.

More than 25 percent of millennials don’t use a financial advisor at all, but among those that do, a significant number use bank-based advisors or CPAs over traditional financial advisors, because, according to the report’s authors, those advisors speak about less-complicated investment options. 

Curiously, almost a third of millennial respondents (29 percent) expect their financial advisors to offer gifts or other favors in exchange for their business. Some popular options included meals, tickets to sporting events, sponsored social events and happy hours. In contrast, only 7 percent of Gen X investors expect these types of rewards from their advisors.  

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