Investment Planning for the Millennial Market Disruption

If you somehow haven’t heard, millennials (generally considered those born in the 80’s to 2000’s) have begun to dominate every part of American life, including our culture, our politics, and our economy. It’s time investment planning strategies adapted as well.

This trend should soon accelerate, as millennials will represent the largest segment of the adult population in the U.S. by the end of the decade.1 While this dramatic shift in U.S. demographics will continue to disrupt industries, many financial advisors dismiss or disregard the coming risks to current investment planning strategies. Compared with previous generations, millennials have vastly different views about investment planning, money, social responsibility, and what it means to be successful. Yet investment planning practices continue to reflect the ideologies, needs, and preferences of an older generation. Smart advisors will seize an opportunity to cut ties with routine, cater to a new audience, and build younger, more sustainable books of business.


Culture of Continuation
Firms that most resist change have cracks in their walls, where things have gone tired from the continuation of haggard business practices that became obsolete a decade ago. The changes brought on by younger generations won’t just expand the cracks, but could level the building. At an average age of 51 and with retiree clients, many high-net worth financial advisors have built businesses based on old investment planning realities while willfully disregarding new-age influences.2 Unfortunately, that age bias and addiction to the status quo could shape the future success of the industry. A Brookings Governance Study, titled “How Millennials Could Upend Wall Street and Corporate America,” explains this investment planning culture of continuation among firms:

“The stronger those cultures are, the more likely the organization will reject any attempt to change ‘how we do things around here’…Instead, the insiders discredit new information from the outside as coming from sources that don’t understand the importance of the existing culture in assuring the firm’s success.”

Millennial Market
Many advisors still thrive on long-term, retiree clients that created wealth over several decades in a similar fashion: after earning advanced degrees, climbing the corporate ladder, and selling a piece of a business. As that clientele continues to age, advisors will need to access younger markets that have created wealth in much different ways and at much different speeds. Today, younger people can become CEOs or sell businesses for millions of dollars before hitting their 35th birthday. In developed countries, 54 percent of millennials started or plan to start their own businesses.3 In addition, just 47 percent of millionaires ages 18 to 34 currently use investment planning services.4 This significant wealth and assets-under-management (AUM) opportunity will continue to expand over time with the population.

Matter of Trust
Advisors willing to serve a broader market must effectively adapt to evolving needs and preferences. In particular, millennials greatly differ from older generations in the way they develop trust, especially in financial matters, ranking as the least trusting of any generation.5 Modern young adults witnessed one of the greatest financial collapses in U.S. history, just as they tried to enter the workforce. They watched parents lose homes and struggle to find employment as retirement funds vanished, all while the government offered bailouts to big banks. Millennials care more about social responsibility and the wellbeing of communities, pragmatism vastly at odds with the culture of Wall Street, big banks, and Baby Boomer partisanship.

The Millennial Disruption Index
53% Don’t think their bank offers anything different than other banks
71% Would rather go to the dentist than listen to what banks are saying
68% Believe the way we access money will be totally different in five years
70% Believe the way we pay for things will be totally different in five years
33% Believe they won’t need a bank at all
73% Would be more excited about a new offering in financial services from Google, Amazon, Apple, PayPal, or Square than from their own nationwide bank.

Millennial Disruption Index: Scratch, Viacom Media Networks

Transparency and Trust
Younger generations demand more transparency from an industry historically filled with convolution. Fee transparency and fairness—already a debated issue in the marketplace— will become increasingly important as younger clients push for prices that reflect successful management, not prices based in institutionalized norms. Millennials also require price clarity, meaning that costs are clear and accessible on a regular basis, not buried in the fine print once every quarter. A recent Charles Schwab commercial cleverly captures the dichotomy of traditional practices and the rationality of a younger audience. In the clip, a young boy asks his father how much he pays the person that watches over their money. “I don’t know exactly,” the father responds, leaving the boy perplexed. When the father explains that they don’t get money back if they’re not happy, the boys ask him why not, leaving the father perplexed.

Tech in Demand
Exponential growth in technology has already begun to disrupt the financial planning industry, and millennials will only accelerate that trend. Millennials, 90 percent of which check their smartphone within 15 minutes of waking,6 require user-friendly online platforms and apps that provide clear and simple financial pictures. Indeed, almost all (88%) of millennials currently bank online.7 Tedious processes like account openings, which older generations accept, must give way to more paper-friendly methods of onboarding, planning, and presenting. Embracing technology will drive massive efficiencies in a business while improving transparency and trust. However, millennials also value personal interaction with an advisor. In fact, 82 percent of millennials would prefer more one-on-one meetings, a welcome statistic for the most robo-wary firms.

Internet of Things
In tandem with technology, advisors should leverage a robust online presence to appeal to a broader audience. Prospects young and old now seek advisors online and instinctively research advisors on Google following any introduction or recommendation. To millennials, and now most generations, Google search results can shape perception of an advisor’s competency. To a millennial, the more search results that appear highest on the results page, the better equipped an advisor is in dealing with more modern day financial needs. Through mobile-friendly websites and social media platforms, advisors can deliver content that’s unique, interesting, and in touch with the audience. This means engaging the community in a way that doesn’t blend with the noise of the corporate financial planning world. Organizations that are “out of touch” miss the chance to build the trust and confidence that younger customers seek first.

Value of Education
Millennials are extremely conservative investors that on average hold 52 percent of savings in cash (compared to 23 percent for other age groups),8 which reflects mistrust as well as a general lack of financial knowledge. It’s therefore important to educate younger clients about common investment planning strategies that align with their specific goals. Offering education at the start of the relationship positions an advisor as a financial steward, helping to garner the trust needed to move forward. While many millennials continue to build wealth on their own, others may soon receive significant wealth from parents. Many advisors are not prepared for such transfers, even for families that are already clients.

Fate of the Rest
In the meantime, millennials and other younger generations will continue on their path of disruption through every facet of society. Advisors that choose to adapt will tap in to a massive opportunity and avoid impending risks. For the unwilling, their fate remains uncertain, as Brookings explains: “All organizational cultures that lose touch with the changes that are taking place in society pose a clear danger to the future of those organizations.” Quite simply, firms that stick with the current business model could face extinction. Thanks to millennials, that model needs to change.  We can help clients of all ages take the first step toward Aligning Life & Wealth®


  • Andree, Kristin. “Why Financial Advisers Shouldn’t Ignore Millennials.” Investment News, 11 Sept. 2015. Web.
  • Hunnicutt, Trevor. “Wealthy Millennials Decline Financial Advisers’ Services: Survey.” Investment News, 28 May 2015. Web.
  • Kobler, Dr. Daniel, Felix Hauber, and Benjamin Ernst. “Millennials and Wealth Management: Trends and Challenges of the New Clientele.” (n.d.): n. pag. Deloitte, 2014. Web.
  • “The Millennial Disruption Index.” The Millennial Disruption Index. Scratch, Viacom Media Networks, 2014. Web.
  • “Millennials in Adulthood.” Pew Research Centers Social Demographic Trends Project RSS. Pew Research, 07 Mar. 2014. Web.
  • “Millennials Invest More Time in Digital Banking – EMarketer.” EMarketer, 25 Mar. 2014. Web.
  • Skinner, Liz. “Adviser: Clients Won’t Know You Exist without a Strong Digital Presence.” Investment News, 3 June 2015. Web.
  • Skinner, Liz. “The Great Wealth Transfer Is Coming, Putting Advisers at Risk.” Investment News, 13 July 2015. Web.
  • “Think You Know the Next Gen Investor? Think Again.” (n.d.): n. pag. UBS Investor Watch. UBS. Web. 2014.
  • Winograd, Morley, and Dr. Michael Hais. “How Millennials Could Upend Wall Street and Corporate America.” Brookings Institute (2014): n. pag. May 2014. Web.

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