There are a lot of rumors circulating about Millennials and money, and for good reason. Millennials are a massive generation with buying power to rival – and eventually surpass – Baby Boomers. But when it comes to retirement, investing, and planning for the future, financial services professionals such as financial advisors are either in the dark or working with a set of false information.
Jason Dorsey, Millennial expert and President of The Center for Generational Kinetics, spoke with the Insured Retirement Institute to clear up major misconceptions, acknowledge stereotypes, and discuss the next steps financial professionals need to take in order to stay relevant and competitive in their field:
What is the biggest misconception that financial services professionals have about Millennials?
“People think Millennials don’t have money,” says Dorsey, “but Millennials actually make up 25 percent of all new millionaires in the United States.” They might have unique preferences in what they buy and how they buy it, but there’s no denying that they have the capital.
Another misconception is that Millennials don’t care about saving, investing, and retirement. “As we saw in the study, Millennials are thinking about retirement and taking action, but they need professional help to fill in the blanks,” Dorsey adds.
Despite Millennials’ dependence on technology and the Internet, the study also found that the vast majority of Millennials actually want to sit down with a financial advisor and be walked through a plan, step by step.
“Millennials DO want help, they DO have money, they ARE loyal, and they WILL refer their friends,” Dorsey emphasizes.
Is there a stereotype about Millennials that financial service providers have correctly identified?
It is true that Millennials are starting to make their financial decisions later, but this isn’t because they are lazy or unmotivated. They are just navigating their life stages with more caution after having experienced a recession. Millennials are graduating college and entering the workforce later than ever before, which also means they’re starting their own households, getting married, and having kids later.
“Just because we’re starting later, doesn’t mean we’re not interested,” Dorsey adds.
How do you see the financial services industry shifting to respond to Millennials?
Millennials communicate differently from any other generation, so in order to truly gain their trust and have influence over them, you need to meet them halfway. “If the financial services industry doesn’t start using social media, texting, and other means of Millennial-approved communication, they’re going to miss this generation completely,” says Dorsey.
But it’s not just about pleasing the persnickety Millennials; every other generation is starting to take their cues from the Millennial playbook, so you risk losing Gen Xers and Baby Boomers if you don’t keep up-to-date. Dorsey adds, “Remember, you’re not just competing with other advisors, you’re competing with what’s most natural to Millennials.”