Being a millennial myself, and having a client base that skews older, I've been curious about how to attract my generation and the next. I agree goals can change generation to generation, but some of these ideas in the article seem...more extreme than I've seen. Any of you running into these types of clients?
https://www.morningstar.com/articles/1012101/what-the-next-generation-of-clients-is-looking-for-from-advisors?utm_medium=referral&utm_campaign=linkshare&utm_source=link
Coach
Your Gen is extremely hard to work with. I hope you don’t take this the wrong way, but: the are entitled and spoiled beyond belief with unreasonable expectations. They are also fee-adverse and expect their hands held ad infinitum. You have a very tough job ahead. I honestly think that the only way to work with them is via a “robo” platform and charging an hourly rate. The typical AUM structure isn’t working with them. They are also rarely loyal and like to experiment hence moving from one firm to the next is almost certain.
I mean this question sincerely. Have you tried educating them? Walking them through all the different ways to invest and the costs (especially hidden costs!) of each?
Fee aversion hasn’t been a generational issue in my practice, it’s a personality thing (and usually means I need to do a better job explaining things or offering alternatives.)
Like any group, millennials are varied. I have mostly younger clients and I start with the fact that I charge a fee. I explain Vanguard if they have a problem with that. I get a few who walk out, but most stay. Study anger study has shown the Advisor benefit.
Most of my younger clients set it and forget it. I've had 2 this year question me about the fee and I compared my performance to a Vanguard index portfolio... and that was that.
The 2 who asked about my fees were in their first year with me, so if they left then I shouldn't have signed them on in the first place. In 8 years I've never been beaten buy an index portfolio, but if / when that were to happen I would talk about the other values I offer and long term goals.
I'm building relationships based on planning and service, and don't sell on performance. During reviews I talk about performance as little as possible because I think it side tracks too many people away from long term goals. A pistol is less accurate than a rifle because the barrel is shorter.
Vanguard is cheap, but no advice, and a call center for service. True DIY folks will never be happy with my free, no matter what it is. I don't compete with them anymore than McDonald's competes with Ruth's Chris.
Fee-based financial planning. My practice is 90% millennials! Fantastic business model for them.
Majority want to invest traditionally! Seeing what their parents went through, the generation understands the importance of saving and investing. They also want real estate a part of their portfolio which is fun.
I’m a millennial and I can’t stand working with other millennials. For the most part they are needy and unable to solve any problems for themselves. They also don’t take responsibility for anything. If I pull my top 20 relationships over 65, over 25% of them are raising their millennial children’s kids.
Millennial investors and people who inherit money after having none are the worst clients ever. I’m trying to save aggressively enough so I can exit when all the boomers die off.
Half my book is elderly millennials. That's $350k on average. If you don't want them I'll take them.