Many advisors aren’t certain how to handle today’s millennial clients who have grown up in a digital world filled with information about finances and investing, but face mounting financial challenges at every turn.
And while many work to reach that generation through digital formats like webinars and podcasts, what these young clients need most remains the same: solid financial advice so they can build build wealth – as well as a strong, trusting relationship with their financial advisor, says Sarah Bull, a managing partner and portfolio manager with KJ Harrison Investors.
“All clients value alignment in terms of their life stages and values, and that really is what creates the dynamic of trust and longevity in terms of relationships,” she explains.
To improve their services for younger clients, firms like hers have intentionally brought in younger advisors who can better relate to millennial investors.
“We have a next generation of financial advisors so that (these clients) have people who share their value systems, are at the same life stages as them,” she explains. “That’s important because advisors need to really become true partners and educators for this next generation to stay engaged.”
Speaking their (digital) language
Sam Lichtman is a chartered financial planner and owner of Millen Wealth Advisors in London, Ont., which focuses on helping young people and entrepreneurs manage their finances and investments.
“The big thing that has worked for me is to just show up where they are and provide education, not sales strategies” he says.
He believes that advisors looking to attract and provide great service to young investors need to reach them in ways these clients relate to, such as on social media or via email and video calls.
They also need to target services to that generation’s current stage of life whether that’s starting to accumulate wealth, dealing with a house purchase or managing company stock options, he adds.
“Servicing a 75-year-old who’s taking money out of their RRIF accounts (and) needs tax and estate planning is going to be a lot different than servicing a high-earning millennial who’s at a technology company that gets stock option grants and RSUs (restricted stock units),” Lichtman says.
“(That client) is looking for more comprehensive advice on the accumulation phase, on starting a family and those types of things.”
Flexibility and adaptability
Being flexible with how advisors connect with clients – instead of just meeting in person – also allows them to expand their business, since that means they can offer services to people from across Canada and aren’t limited to one local geographical region.
It also allows them to serve the kids of their older clients who may have moved away from home, instead of losing that generation to a new locally based advisor.
Advisors also need to “change your mentality from an ‘I know what’s best mentality’ to an active listening mentality,” he says.
“They need to actively list what these younger clients are asking for, and then … tailor their model, portfolios and technology suite to work with those clients,” he says.
That may include using technology to provide meeting notes and investment recommendations, as well as listening to them talk about their goals for their lifestyle, their careers, travel, and relationships – and helping them to reach those aspirations, adds Bull.
Understanding new product offerings
There have been huge advancements in the type of investment products available in the last few years, including index funds and exchange-traded funds – and the fees charged, says Lichtman.
Younger investors may also have questions about newer investment options such as alternative investments, including private credit and equity, and impact or ESG investments, Bull says, adding that this generation is more deliberate in what kind of companies they invest in.
Those with significant assets or who are inheriting wealth may also want to know their options for philanthropy.
Helping young investors cut through the noise
Younger investors today have access to a massive amount of information about investing and investing products, says Bull, and likely know more when they start investing than previous generations.
“This generation doesn’t want jargon … and they really want to understand the ‘why’ behind every recommendation. They want transparency, they want relevant communication,” she says.
“The next generation wants clarity, so (the question is) what are you doing to provide that clarity?”
