How Millennials Select an Advisor

8/1/2020

 Millennials have been criticized and teased for many years, being called “snowflakes” and being the brunt of countless jokes that other investors love to share.  However, it may now be time for Millennials to be laughing, as they are now entering the phase of life where they are significant income generators and wealth accumulators.  This makes Millennials an attractive potential client for many financial professionals.  The concern however for these investors is knowing what to expect from a financial professional and what traits are ideal in a financial professional.

 

The first positive among this group of prospective clients is that nearly three quarters of Millennials are at least somewhat likely to use an advisor in the future, according to Spectrem Group’s recent report Preferred Sales Approach: Capturing the Wealthy Investor.  This does mean however that a large amount of investors are looking for a financial professional, so a Millennial investor would be wise to find a financial professional they trust earlier rather than later.  How do Millennial investors find a financial professional?

 

Millennials are the most likely age segment to proactively reach out to a financial professional that was recommended to them by their accountant.  Millennials often have an accountant before they have a financial advisor, so this is a logical place to ask for a referral.  Accountants likely have developed a relationship with the financial professionals they refer to over the course of many years, so the accountant can likely provide a detailed recommendation, or potentially a few different recommendations depending on what the Millennial client is looking for.

 

What type of financial professional are Millennials looking for?  They want an advisor they would want to be friends with.  Wealthy millennials are more likely than other ages to prefer a financial professional who is older or similar age to themselves, and over a third of Millennials care about an advisor’s religion and political beliefs.  Three quarters of Millennials are looking for a financial professional that is a CFP that is well organized, consistent and has the expertise they are looking for.  Each Millennial client needs to determine what is important to them in terms of traits and characteristics that are critical to have in a financial professional.

 

Millennials are the generation that many financial professionals are pursuing as new clients.  These investors need to be prepared for being approached by a variety of financial professionals and seek guidance from trusted sources regarding how to make a decision on what type of advisor to work with.  The relationship between investor and advisor is likely to be a long-lasting one, so making a decision that gives you peace of mind is critical.