There are plenty of reasons financial advisors are eager to attract millennials: They’re entering their prime earning years, many stand to inherit wealth from their parents, and in many ways, they represent the future of advisor firms.
But millennials also often spark doubt in the minds of advisors. This age group — which Time magazine calls the Me, Me, Me Generation — are typically stereotyped, in part, as people who are glued to their phones, who eschew human interaction, and who are unlikely to invest their money.
But don’t believe it, While this group has different attitudes about investing and managing money than their parents, they could be the easiest to approach and most accepting of guidance. Here we debunk key myths.
Myth #1: Millennials aren’t interested in (or don’t see value in) getting financial advice. Millennials are in fact more likely than any other generation to say that having a financial advisor they trust is important to their financial confidence. Overall, they see financial advisors as sources of sound financial advice, and partners who can help them achieve their goals.
Even those currently not working with advisors say they’re likely to start using one in the near future. Together, this makes millennials more likely than any other generation to work with an advisor.
Advisors who take stock in this myth may be mistaking risk aversion for apathy. For a positive engagement with millennials, it’s important for advisors to first understand their appetite for risk — where it comes from and how to align your guidance with it.
This age group grew up during the financial crisis of 2008 and the Great Recession that followed; it’s no surprise that across all major priorities, millennials are less confident that they’ll achieve their financial goals than their parents and grandparents were.
They’re also carrying significant student debt as they enter the workforce (about two and a half times the amount students owed 10 years ago), and this may affect their tolerance for risk. At the same time, they’ll be reaching important life milestones (buying a home, starting a family, funding their children’s educations) and therefore face more financial complexity and challenges in their lives.