Millennials aren't facing financial education issues that are profoundly different from what their parents faced, according to Veena Khanna of Key Private Bank.
"As they're maturing, they want to learn the same things that you and I and others needed to learn as we matured out of high school and then into college and got our first jobs," the bank's director of wealth advisory services said in an interview. Budgeting, cash flow management and credit management are just as important for millennials as they were for boomers and Gen X, she said.
What millennials do with that education and how they interact with financial professionals, however, will distinguish them from their older counterparts, Khanna said. Millennials "have a different value system" from older investors, which will "drive whether or not financial advisors or wealth management firms will be able to attract and retain the millennial population."
Millennials' view of wealth accumulation is different from their parents', Khanna said. "They're incredibly concerned about the communities they live in. They're do-gooders […], and some of that will play into how they think about their own wealth management."
Millennials also have different expectations around privacy, Khanna said. They're more open on social media, and are more influenced by group think, which "will force us as wealth managers to think about training and coaching them in a different way."
She believes millennial clients will "gain more from their peers in a group-think environment." Their reliance on peers and general tech savviness will probably drive advisors' engagement efforts toward social media, she suggested, and "pushing out content to them as an affinity group and allowing them all to consume it together and opine on it in an open forum."
Bring Millennials Into Legacy Planning
Millennials' reliance on peers presents a challenge to advisors trying to connect with younger clients, as few advisors fit into that peer group. "As unfair as it may be, this particular generation pays more credence to younger advisors," she said. "This is primarily due to technology credentials; if the advisor can't talk technology then they may be at a disadvantage."
In addition to building up their tech expertise, firms should bring in some younger advisors "to tag team and to learn and to start dealing with the younger clients," Khanna suggested.
