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Top Advisors Divulge Keys to Winning Trillions in Millennial Business

By Garrett Keyes April 16, 2018

Financial advisors have issued an industry-wide warning to not disregard over a trillion dollars of potential business entering millennials' hands over the next five years.

But how do advisors entice new millennial clients and will best practices change from those used to win Generation X business?

Experts say nabbing your share of millennial wallets boils down to adapting three main areas of your business: digital marketing, targeted outreach and staffing.

Learn how to focus your digital marketing campaign.

Winning millennial investors means maximizing your digital marketing reach and growing your digital footprint, experts say.

Millennials grew up surrounded by the internet. They expect to access and validate everything online, Kevin Mulhern, cofounder and CEO of AdvisorStream, says.

So, your presence on the internet can be a powerful tool, if used correctly. A recent Fidelity study reveals 44% of 21- to 30-year-olds are extremely interested in learning about investing. Much of that learning is likely to be done online. So, reaching millennials through a multitude of digital platforms by producing high-quality content communicating investment information to fit their demands is essential, Mulhern says.

Publishing investment- and practice-related content through Facebook, Twitter, LinkedIn, Instagram, websites, blogs, and videos is a critically important way of reaching potential Generation Y clients with marketing material to broadcast information and let them know what your firm is about.

“If you are not there [on social media], you are missing the boat.”
Louis Cannataro
Cannataro Park Avenue Financial

Because of the nature of the internet and the browsing habits of internet surfers, these marketing efforts may not garner many responses from prospects but they are important nonetheless to help potential investors familiarize themselves with your brand. Advisors should put the content online so millennials can discover it on their own.

But additionally, Mulhern thinks social and digital media is “important for when the millennial determines they want to interact with you.”

And he warns that providing irrelevant content quickly causes millennials to disengage from an advisor, never to return. Forced interaction through random mailing is also highly discouraged behavior likely to cause reactionary disengagement.

Millennials will reach out to the advisor after conducting their own background research and gaining exposure to the advisor’s services through their issued content.

Yet using what he calls ‘inbound content,’ Mulhern says advisors can prospect new millennial clients.

Inbound content offers visitors of digital media pages the option to subscribe directly to emailed content, so millennial investors can easily contact the advisor when they are ready.

And as a generation more comfortable with sharing than any before it, millennials will share content they like with peers, thus extending an advisor’s reach further into this prized demographic.

“If you are not there, you are missing the boat,” Louis Cannataro, wealth management advisor of Cannataro Park Avenue Financial, affirms in relation to social media.

Know where to target your outreach efforts.

Despite digital media’s increasing power in client acquisition, some experts say the most effective approach to winning millennial clients still centers on referrals. But the key differentiator is making sure your firm is building a multi-generational practice.

David Jeff Roberts, private wealth advisor at Jeff Roberts & Associates, makes sure to “specifically ask about [clients'] grandchildren” when he meets with people over fifty.

Trillions of dollars of wealth are set to be transferred from older generations to millennials over the next five years, Randy Carver, president of Carver Financial Services, says. Roberts believes this presents tremendous opportunity to “develop relationships with the next generation.”

Paul Ewing, CEO of Prosperity Advisory Group, agrees. Most of his millennial clients mainly come through family and friends.

The importance of retaining millennials in the same advisory firm as their elders is emphasized after looking at the ROI of reaching undiscovered millennials versus millennial whom advisors already know. Ewing says he is “not allocating anything to developing unknown millennials.”

Rather than spend money marketing to the Gen Y relatives of current clients, some advisors argue that the younger generation is often already aware their family has a professional relationship with an advisor – and that those children trust the judgement of their older family members.

Gaining the trust of millennials can be a difficult but essential task in winning their business, Cannataro says. They often “come in and [are] a lot more skeptical, [causing] the relationship in the beginning to take longer to [establish itself].”

At Prosperity, Ewing says 42% of their clients are multigenerational. Targeting multigenerational clients lets them build relationships that will continue to develop with the family into the foreseeable future.

Optimizing the process of identifying the most viable members of the younger generation of potential clients is also essential, and Ewing has developed a system.

“When a client comes in to meet with us our dashboard [shows] a green light when we are working with the next generation and a red light when we are not yet.”

If the dashboard light is red, Ewing knows to pursue an advising relationship with the next generation, ensuring he doesn’t miss what some FAs deem the best method of gaining millennial clients.

Discover your staffing needs for millennials and how to fill them.

Having the necessary staff to pursue millennial clients is key in winning their business – and many FAs feel millennial staffers are best equipped to advise millennial clients because they have relatable life experiences and goals.

Roberts says millennial clients relate to millennial advisors much faster than advisors of other generations because people “have a connection when [they] are in the same life [stage]. That [trust] goes a long way.”

Ewing concurs. His own children work with the younger advisors at Prosperity.

Randy Carver

But finding millennial advisors to employ has proven problematic for many FAs, including Jeff Roberts & Associates, which has “had a very difficult time [making] millennial team members stick.”

Difficulty hiring and keeping millennial employees seems to be a common problem for advice firms. The problem might stem from differing perspectives regarding the loyalty expectations business owners have and the way millennials seek to grow their careers, one FA says.

If advisors want to hire millennials they must “think about the way millennials operate,” Michael Nathanson, chairman, CEO and president of The Colony Group says.

Such considerations could lead to changing working conditions such as vacation provisions, the range of benefits, corporate philanthropy policies, dress codes, and work hour policies.

“These are things many millennials are looking for. If you don’t have them [updated to what millennials] want, you have to ask yourself why you are having difficulty.”

Financial advisors exist in an industry that requires constant adaptation to survive, and the coming rise of millennial investors may present the next major hurdle for such adaptation, experts say.

Wealth is increasingly being transferred out of the hands of baby boomers and Generation X and into the hands of Generation Y investors. But “there is a thirst from the [millennial] generation that wants the advice we give,” one FA exclaims.

FAs wishing to survive and capitalize on the significant transfer of wealth must quickly adapt best practices to finding millennial clients or they may be left behind, industry pundits believe. But even after advisors have learned how to win millennial clients, the next major question arises: What needs to be done to keep these potentially flighty clients from leaving?

This article is the first of a two-part series. The second part will examine how advisors keep millennial clients from leaving.