Phuong Luong, an educator, financial planner and investment strategist, has introduced a column on Morningstar that focuses on what she has learned from working with clients in their 20s and 30s, as well as with clients of all ages who want to invest with their values.
“For advisors who embrace these clients, it can be a big opportunity to grow their firms and make a positive impact,” she writes. “However, I’ve spoken with hundreds of millennial clients across the country who feel like traditional financial advisors do not understand these issues.”
Here are three things Luong says the next generation of clients want from their financial advisors, and how advisors can help millennials and others.
1. Student loans are an issue across the income and wealth spectrum.
As education costs continue to outpace the inflation rate and income growth, student debt has implications for taxes, homeownership, starting a family and retirement savings. It behooves advisors working with millennial clients to understand loan forgiveness programs and strategies for managing student debt in light of competing priorities and overlapping life goals.
2. Clients want to align their investments with their values.
Many clients find it hard to align investments with values, either because their employer-sponsored retirement accounts include index funds that hold companies in problematic business lines, or in the case of those with taxable investments or inherited wealth, their financial advisors trivialize their goals of investing in nonextractive industries or don’t know how to compare sustainable investment options. Some young people just stay out of the stock market for these reasons.