What Millennials Are Looking for in an Advisor: How to Appeal to Young Investors


I am a member of Generation Y (born roughly between 1980-2000), also referred to as the Millennial generation. Like many of my peers I have grown up in the age of information, where all of our needs are just a Google search away. 

As young investors, we are reaching a point in life where personal finance means more than budgeting for a road trip, or saving enough money for the next hot tech gadget.  We are now preparing to become first time home owners, start a family, pay off student loan debt, and even save for retirement. As our needs and personal worth grow, priorities begin to shift from simple budgeting to investment management and retirement planning. Millennials have been quick to adopt web-based services like Mint.com and similar technologies that provide easy, instant access to personal finances and spending.  As a result, there is an expectation that similar comprehensive, easy, and low cost technology is available for the more complex world of investment management and retirement planning. 

A simple online search for these services yields many “robo-advisors,” as they’ve been called.  At their very basic, robo-advisors provide their clients with access to low cost managed accounts, and/or algorithm based advice on their existing investments. Much like Mint.com, most robo-advisors allow the ability for their clients to aggregate their accounts from thousands of financial institutions at a very low cost, if any at all.  Along with flashy websites and convenient mobile apps, robo-advisors are reinforcing many expectations young investors have come to expect, specifically a holistic view of one’s wealth.

While robo-advisor services have their advantages, they lack the personalized experience that traditional, advisor-based firms provide.  Despite the fact that robo-advisors are extremely appealing to Millennials, they often underestimate the value of human interactions.  According to a survey conducted by SEI Research Insights, about 58% of mass affluent and 70% of HNW Gen Y individuals agree with the statement “I am willing to pay for advice regarding my investment,” with only about 45% and 50% of Baby Boomers respectively.

From online personal finance tools to more sophisticated robo-advisors, one of the major services that Millennials have come to expect is the ability to see a holistic view of their net worth and investments. As Millennials grow older and begin to enrich their personal finance goals, they will start seeking out  advisors who can that provide a personalized experience.

Although traditional advisors have the advantage of human interaction, there are still certain expectations they will need to meet in order to compete for the Millennials business. 

Don McHenry is Technical Relationship Manager at ByAllAccounts Inc., a Morningstar company.

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