A magnet for millennials: How advisors can draw Gen Y clients

Does your communications strategy specifically target the millennial generation? If it doesn't, you should make immediate changes to reach out to this audience.

Millennials, also referred to as Generation Y, are those born from the 1980s through the early 2000s. Millennials are poised to inherit approximately $41 trillion from their baby boomer parents over the next 40 years, accounting for the single largest intergenerational wealth transfer in human history.


Millennials working computer
Alvarez | Vetta | Getty Images

Many older clients, however, are beginning to voice growing concerns over the financial preparedness of their millennial children, fearing they may lack the means to deal responsibly with a sudden influx of wealth.

The millennial generation is highly dependent on technology—specifically, social media sites such as Facebook and Twitter—as their primary source for information. They're accustomed to instantaneous acknowledgement of even their slightest achievements.

So as many wealthy baby boomers transition into retirement, they're beginning to ask some tough questions about the overall wealth preparedness of their heirs—and turning to financial advisors to help impart strong financial values to millennials.

Wise beyond their years

As is often the case, there's a great disparity between perception and reality, brought into sharp contrast by a recent research study conducted by Wells Fargo. The 2013 survey explored savings and investing attitudes and behaviors among a representative sampling of 22- to 32-year-old millennials.

More than half of respondents, some 54 percent, cited paying off loans as their "single biggest financial concern." The anxiety is well-founded, considering that many in this generation have amassed an unprecedented amount of student loan debt without the relative certainty of securing high-paying jobs that will allow them to pay down that burden.

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It's not only that millennials' financial concerns are rational; their attitudes toward money appear to be well grounded as well.

When asked how they would utilize a tax-free windfall, only 3 percent of millennials said they would spend the money and enjoy themselves.

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Nearly half (49 percent) would use it to reduce their debt, 14 percent would earmark the money for their retirement nest egg, 12 percent would use it to bolster their emergency savings, and 11 percent would apply it to the down payment on a home. These responses hardly seem to represent the mind-set of a frivolous and self-indulgent generation.

Simply put, the common perception of millennials is deeply flawed. While they are indeed a technology-driven generation of information sharers, they are far from the self-absorbed narcissists many believe them to be.

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Millennials are actually very much value-based investors with a heightened social awareness—exceedingly cause-driven and deeply charitable.

Keep in mind that these young adults have come of age during the greatest economic crisis since the Great Depression.

"Millennials tend to be extremely socially conscious, driven as much, if not more, by a desire to do good as to do well."

They've seen the devastation wrought by the negligence and excess of Enron, Worldcom and countless other firms and individuals. And as a result, they've become some of the loudest voices calling on businesses to play a more active and responsible role in society.

A recent World Economic Forum study of 5,000 millennials in 18 countries, including the U.S., found that young adults believe "improving society"—even more than generating profits or driving innovation—should be the No. 1 priority of businesses.

Other studies have also shown that because of their deeply rooted comfort with social networking, millennials tend to be far less private than their parents' generation.

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They're considerably more open to discussing personal matters, such as finances and investments, but not in a structured, formal setting.

Millennials generally prefer casual communication. They're scanners of information rather than readers and, as such, tend to prefer a steady stream of digestible nuggets.

Unlike their parents, they're far more likely to absorb information through social media and online outlets rather than mainstream newspapers, radio and/or television.

As wealth advisors, we're deeply aware of the vital role we can play in helping to bridge the financial communication gap between our boomer clients and their millennial children.

It's imperative we educate the next generation about the challenges that come with managing wealth, by utilizing the media they're most familiar and comfortable with. These include:

  • Facebook, Twitter and LinkedIn engagement.
  • Timely and topical blogs.
  • A host of financial awareness and market outlook videos.
  • Weekly online market commentary.
  • Monthly electronic newsletters.

By establishing a relationship with your future inheritors today, we're able to better prepare them for a tomorrow that will pose far different wealth challenges than either their parents or grandparents faced.


Common core values

Despite numerous fears and concerns about the fiscal wherewithal of their millennial children, baby boomers' worries are deeply unfounded, according to the latest research.

There's no doubt that as the first "Internet generation," millennials have a unique approach to knowledge and information-gathering.

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But at their core, they share many of the same values held by previous generations. In fact, often unbeknownst to their boomer parents, millennials tend to be extremely socially conscious, driven as much, if not more, by a desire to do good as to do well.

I recommend that you shift how you communicate with your clients.

Boomers are the fastest-growing segment on social media, so a communication shift will reach not only the millennials but encompass your current client base, as well.

Many advisors are already incorporating social media into their communications strategy. And if you embrace this communication shift, I believe you, your clients and your firm will experience the benefits firsthand.