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4 ways to sell FIAs to affluent millennials

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The wealth management industry would be well-served to learn more about the investment preferences and habits of wealthy millennials, according to Phoenix Marketing International (PMI)’s millennial data from its Global Wealth Monitor.

Affluent millennial investors, which PMI calls “Active Wealth Millennials®,” are educated and ambitious. “These young and dynamic investors have accumulated an impressive level of wealth at a very early age and are the vanguard of the next generation of affluent investors,” says David Thompson, managing director of affluent practice at PMI. As a group, affluent millennial investors:

  • Make up approximately 990,000 U.S. households
  • Are highly educated, with 60 percent having a four-year degree or more
  • Are, on average, age 31
  • Have at least $100,000 in investable assets
  • Are active with their finances, seeking riskier investment opportunities than more conservative investors (this group has also typically added to or made new investments in at least three asset categories within the previous six months)
  • Consider themselves more globally minded than their older counterparts
  • Have diverse, globally allocated portfolios
  • Form a very diverse group, with 54 percent Caucasian, 20 percent Asian-American, 9 percent African-American and 7 percent Hispanic
  • Are entrepreneurial, with about 18 percent of affluent millennial investors being business owners
  • Are primarily men– approximately one-third (32 percent) are women and 68 percent are men.

In short, affluent millennials are a whole new class of financial services customer, according to a 2015 LinkedIn study – and there are many opportunities for advisors to grab the attention of this group’s members. Here are four approaches LinkedIn suggests.

1. Personalize and socialize

LinkedIn research shows that affluent millennials turn to social networks for guidance and advice on finances more than any other group. “Affluent millennials are hungry for information that is relevant to them,” says the LinkedIn research.

2. Inspire trust, enable independence with consultative approach

Affluent millennials want more control over their finances, but they understand they may need guidance in certain investment decisions. “Affluent millennials are looking for financial advisors who act more as consultants than as account managers,” says the study.

3. Create a loyal customer

Once these individuals become customers, they are very likely to stay so long-term. “There’s a chance to reach out to affluent millennials now and build relationships with them before the competition is able to,” explains LinkedIn.

4. Start retirement planning now

According to the LinkedIn research, 72 percent of affluent millennials say they are willing to sacrifice today in exchange for future payoffs. Although about two-thirds of affluent millennials have some sort of retirement savings account, one-third does not. Advisors can cast a wide net and execute a long-term retirement plan, thereby earning long-term loyalty from this future-minded group.

Research from the Indexed Annuity Leadership Council confirms that, of all the generations, millennials are the most open to retirement savings options that protect against stock market fluctuations while offering growth. Products like fixed indexed annuities that provide guaranteed lifetime income while protecting the initial principal investment can be a great offering for this group.


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