How Can Wealth Managers Engage and Retain High Net Worth Millennials?

October 17, 2016

How Can Wealth Managers Engage and Retain High Net Worth Millennials?

When many people picture a millennial, they imagine someone fresh out of college. It’s easy to imagine a naïve 20-something, working as a barista, Snapchatting and Instagramming, listening to vaporwave music and struggling underneath a mountain of student debt.

That mental picture may - or may not - be accurate for the younger end of my generation. But some of us are *gasp* over 30 now and have advanced in our chosen careers. Some of us are entrepreneurs who have enjoyed incredible success.

High net worth (HNW) millennials are out there, more are advancing in the ranks every day, and they’re looking for someone to help manage their wealth.

Just four years from now, Millennials and Gen Xers will control $30 trillion of investable assets. That’s about half of all available assets in the world. They’re a huge market that wealth managers can’t ignore. And they’re an audience with distinct preferences for how they interact with their financial advisors.

To determine how millennials’ attitudes toward wealth management differ from other demographics, LinkedIn and Greenwich Associates surveyed nearly 500 HNW individuals. We discovered several ways millennials are rewriting the rules for engaging with wealth managers. These new developments are especially important because millennials tend to be a bellwether for the rest of the population—that is, their preferences quickly become industry norms.

You can read the full results in Next Generation Customer Journey in Wealth Management: High Tech or High Touch? But read on for a brief guide to what wealth managers need to know to attract, engage, and retain millennials.

Millennials Are Open to Changing Wealth Advisors

In our survey, more millennials were contemplating changing advisor in the next 12 months than any other demographic. Two out of five said they were actively looking for a new advisor.

The desire for better performance is one motivator for change, but it’s not the only one. Many also cited a desire for more personal engagement, and an openness to trying new strategies.

Millennials are more likely to have relationships with more than one wealth manager, relying on electronic communication to make contact. That means there is ample opportunity for a wealth manager to be of service.

Social Reputation Matters to Millennials

How are the millennials in the market for a wealth manager finding one? As with previous generations, personal recommendations are part of the search. Increasingly, though, an advisor’s social media profiles play a role in decision-making. One-third of millennials evaluated potential wealth advisors by their social media profile, compared to only 10% of all other age groups.

In all, over half of millennials look at an advisor’s posts on social media, compared to one-sixth of all other respondents.

Millennials Value On-Demand Information

It’s often been said that millennials are the first true “digital natives.” They never had to open an encyclopedia, rummage through a card catalog, or even check song lyrics in an album’s liner notes. Real-time information is not a novelty to be marveled at—it’s the expected bare minimum.

To keep millennials happy, expect to provide a few sources of 24/7 information; for example, a mobile app, social media platforms, and automated text alerts. You don’t have to extend your office hours until the wee hours of the morning. But it’s important to have options for when you aren’t personally available.

A Majority Prefer Electronic Communication

Our survey showed that the majority of millennials demand updated methods of delivery. Seventy percent of those who had changed their contact preference in the last year said they wanted more electronic communications. Meeting that demand could be as simple as using e-mail instead of voice mail, in addition to the “always-on” information sources mentioned earlier.

Be prepared for work that used to be done face-to-face to go electronic. Only 40% of our millennial respondents met with an advisor in person to make an investment plan.

Digital Isn’t Everything

Despite these preferences, millennials still find value in face-to-face meetings. After the initial research and start-up time, we found well over half of millennials place a huge value on face-to-face meetings. Millennials value authenticity and an old-fashioned personal touch—so it’s not as simple as creating the right mix of robo-management options and taking a hands-off approach.

Millennials already have a massive effect on the economy, and their clout will only grow over the next decade. Our studies show that pursing new means of communication is vital to attracting, engaging, and retaining HNW individuals in the millennial demographic. At the same time, though, it’s important not to neglect the value of in-person interaction.

For the full results of our study, download Next Generation Customer Journey in Wealth Management: High Tech or High Touch?