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Four Low-Tech Ways to Serve Millennial Clients

How to make inroads with millennials without large investments in technology.

Everyone has heard the stereotypes. Millennials are selfish, hard to please and lack ambition. They grew up in the "everyone gets a trophy" era, which has stripped them of their drive to succeed and left them entitled.

Like all stereotypes, these characterizations are mostly untrue, continuing a long tradition of younger generations having to absorb the blame for all of the country’s perceived problems. Indeed, many of the same things were said about Generation X and even the baby boomers before them.

At the same time, millennials are no doubt unique. They are, for instance, a very high-touch client segment, demanding more frequent follow-ups or check-ins than their parents. Also, they tend to place more emphasis on transparency and accessibility, and value close, personal relationships—even if the foundation of such relationships is defined differently, thanks to their fervent use of digital communication and social media platforms.

While it may be possible to address these preferences through technology solutions, broker/dealer technology platforms are still evolving in these areas industrywide. What’s more, it's not clear how well or how cost effectively they will meet millennials’ expectations. It’s therefore important to find other, perhaps less expensive ways to connect.

Below are four ways to make inroads with millennials without making large investments in tech platforms that may or may not make it easier to serve this market more effectively:

  1. Help millennials overcome biases about the industry. Consistent with the above, many in the industry have preconceived notions about millennials. It works both ways, because millennials have preconceived notions about us, too. Remember, many of them came of age during the financial crisis, so when they think of financial advisors, Bernie Madoff often comes to mind. Accordingly, there is a healthy dose of skepticism about what everyday, Main Street financial advisors do. Come up with ways that will distinguish you from the caricature that has formed in their minds. Talk about who you are as a person, what kinds of interests and values you have, and why your individual background can be the basis for both a professional and personal relationship.
  2. Go where they go. According to Forbes, 62 percent of millennials are more inclined to patronize a business they have engaged with online or via social media. Without a strong digital-marketing presence, you’re operating at a disadvantage. Meanwhile, other marketing techniques that may have worked in the past are very unlikely to bear fruit with these investors. Millennials, for example, probably won’t attend a weekend investment seminar. Instead, consider hosting active relationship- and community-building events, like running in a local 10K or a group rock-climbing outing. Another way to potentially distinguish your practice is by expanding into socially responsible investing. A recent TIAA study found that 90 percent of millennials are interested in socially responsible investment vehicles. 
  3. Recognize that your role may shift slightly from planner to validator. Millennials frequently have entrenched ideas about how they want to invest their money. They’ve either done their own due diligence online, formulated ideas based on conversations they’ve had with friends, or, due to scars caused by the financial crisis, are hesitant to outsource all their important financial decisions to someone else. Because of this, many will approach advisors with their own plans, wanting only validation or someone to act as a sounding board. For most advisors, this will represent a significant service shift—but one they will probably have to get used to.
  4. Provide discounted fees or a tiered pricing schedule. For advisory services, consider offering discounts or tiered pricing, particularly for clients who have fewer assets to invest. This is the "Google-it" generation, and they research everything. So they’ll know about the forces reshaping the industry, including digital providers that offer a very competitive pricing structure. As their income and investible assets grow—and your relationship with them deepens—so can your fee structure.

No one can doubt millennials' importance to the future of the financial services industry. Not only are many entering the prime of their professional lives, but there’s a massive wealth transfer just around the corner, with some estimating that as much as $30 trillion will change hands over the next two decades.

For advisors having trouble making inroads with this key demographic, there may be a number of cost-effective strategies that can be easily implemented, requiring more of a change in mindset and approach rather than running out to buy all the latest practice-management bells and whistles.


Wade Wilkinson is CEO of Securities Service Network, an independent broker/dealer and RIA specializing in the creation of operating efficiencies for financial advisors.

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