Best Technology Practices for Financial Advisors to Engage Millennials


Last month, I attended the Money Management Institute's 2014 Sales & Marketing Leadership Summit to serve as the moderator on a panel of experts which discussed understanding and capturing the next generation of investors. Joined by industry veterans from leading wealth management firms, I walked away from this discussion with some fresh insight and excitement about Millennials.

Millennials represent an up-and-coming generation whose use of technology is unprecedented ...

Millennials represent an up-and-coming generation whose use of technology is unprecedented, and many of these forward-thinking individuals have great ambitions for the future. At the same time, Millennials have been dubbed "The Me Me Me Generation" by critics – but I believe these 77 million young Americans are more appropriately identified by Pew Research Center as "those born after 1980." I should know since I have three millennial kids!

If you ask an established financial advisor how they feel about working with Millennials, the feedback may not be so good. There is an obvious disconnect between advisors and Millennials, which is highlighted in a 2013 Merrill Lynch Wealth Management survey of young, high net worth investors. The survey polled investors aged 18 to 35 (with at least $1 million in investable assets) and found that 72 percent of them are self-directed investors, while nearly half have "no financial advisor of any kind."

Embedded Skepticism

Merrill Lynch notes in its survey report that "Millennials take nothing at face value" and "skepticism appears to exist in this generation's very DNA." Millennials also equate financial advisors with salespeople – which is a major turn off for them – and some Millennials question why they should pay for financial advice, according to the survey.

Aside from the survey, however, is some good news: Millennials are generally adaptable and willing to reconsider their opinions, especially when presented with verified facts and data from sources they trust. The key challenge is establishing and maintaining trust with Millennials, which wealth managers can do through the power of technology.

Best Technology Practices for Success

Here are five tips, based on best technology practices that can help wealth managers bridge generational gaps with Millennials and engage them as clients:

1. Use collaborative financial planning portals with client-facing options –

With Millennials, the "one size fits all" approach to investing doesn't work, so you must be very flexible in order to meet their individual needs. Modern technology enables wealth managers to simultaneously leverage collaborative client-facing and advisor-facing portals – while seamlessly aggregating data from both – and this opens up opportunities with three distinct groups: 1. Millennials that prefer a "do it yourself" (DIY) approach to investing; 2. Millennials that prefer an advisor-driven approach; 3. Millennials that prefer a hybrid DIY/advisor-driven approach.

2. Immediately master your skills on tablet and mobile devices –

Some sources predict that PCs and laptops will be obsolete within the next few years, but for a considerable portion of Millennials, these gadgets are already outdated. Accordingly, you should consider communicating with Millennials through the mediums that are most relevant to them. Your best bets are tablets and smartphones, which are compatible with most client-facing portals – and the top portals have integrated Mobile Apps to help you score points with Millennials.

3. Establish reasonable financial goals using technology –

Millennials are sometimes known for having a "my way or the highway" approach to things, especially when it comes to their money – so you do not want Millennials to think that you have premature and harsh judgments about their goals. Go through the financial planning process, and let technology do the talking: portals can graphically illustrate how Millennials' lifetime goals stack up against their financial situations. Budgetary shortfalls and overly-ambitious objectives can be sensibly addressed through "What If" scenario planning, enabling you to collaborate with Millennials on middle-ground alternatives.

4. Use social media to showcase your thought leadership –

It is very important for you to establish a robust presence on popular social media outlets like LinkedIn, Facebook, Twitter and YouTube. You want Millennials to see that you're plugged into social media, and that you use these outlets to share your expertise as a wealth manager – not to dispense sales pitches. Also share original content, including infographs, charts and video clips, but keep your comments short and sweet. You should also post links to high-quality websites that have updates on financial trends, expert research and data.

5. Avoid coming across as an overly-aggressive salesperson –

Overly-aggressive wealth managers and Millennials are like oil and water. They do not mix well because Millennials are naturally skeptical and need to be in the driver's seat at all times. When conversing with Millennials, let them do most of the talking upfront, and for your part, simply listen and respond as appropriate; this will help you better gauge expectations, and the level of engagement required for meeting them. Always be prepared with immediate evidence to validate your talking points, as Millennials will surely expect it. 

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