Much has been written about job-hopping millennials. Turns out they aren't particularly loyal to their financial advisors either.
The annual J.D Power Full-Service Investor Satisfaction Study found 48 percent of millennials with at least $100,000 in investable assets “probably will” or “definitely will” leave their investment firm. Only 8 percent of other generations of investors said the same thing.
For some investment firms, the findings about millennials might feel ominous, especially considering they will be on the receiving end of the largest generational wealth transfer in history.
But that’s a glass half-full view of the young and affluent. Knowing that almost half of all millennials plan to switch firms could be a window of opportunity. Advisory firms able to retain millennial clients and capture others “can expect significant ongoing rewards,” according to the J.D. Power study.
One way firms and advisors can help keep millennial clients is to broaden the financial goals they have tended to focus on with other generations. While preparing for retirement remains a priority for millennials, saving for major purchases or education are more important to them than, for example, capital preservation or estate planning.
Advisors who prioritize goals with individual clients might think they are remedying this already, but can help themselves by writing a financial plan addressing client needs. Only 54 percent of full-service investors have a documented plan, according to J.D. Power.
The study also ranks full-service investor satisfaction across companies. In 2017, Charles Schwab & Co. ranked highest in satisfaction for the second consecutive year followed by Fidelity Investments and Edward Jones.
This was the 15th year the firm has conducted the study, which surveys more than 6,500 investors who work with an advisor.