“Don’t trust anyone over 30” was the baby boomer’s generational cry in the 1960s. Millennials are expressing a similar wariness toward financial advisors.
Well connected (digitally, that is) Millennial investors came of age at a time of epochal economic upheaval, and it has made them skeptical, according to a new study by Accenture.
“The financial crash has led to a sea change in consumer attitudes toward investing, creating—unsurprisingly—a state of general distrust towards the financial community, especially banks and financial advisors,” the study finds. “In a convergent trend, increased usage of digital/social channels in everyday life is spilling over into the relationships consumers have with financial institutions and those providing financial advice.”
These disaffected Millennial investors belong to a new investor segment Accenture is branding Generation D. What defines them? “They are active investors with higher levels of income, education and assets, combined with a deeply digital lifestyle,” Accenture reports. “For these always-connected consumers, technology—online, mobile, and social—is deeply woven into the fabric of their lives as they strive to create, maintain and pass along wealth.” They typically use multiple devices on a weekly basis to pay bills, manage their accounts and monitor their investments.
With an estimated $30 trillion in assets that will shift from boomers to their heirs over the next two or three decades, financial advisors will need to forge an attitude adjustment amongst Millennials who view them with a skeptical eye. While 71 percent of Generation D Millennials are investing, less than one-fourth (22 percent) use an advisor, the Accenture study finds, and those relationships are primarily transactional.
These self-described conservative investors are more likely than baby boomers to say they prefer “tried and true” investment options, while one-third say they seek “comfort and predictability” in their investment options.
Rather than take a financial advisor’s advice at face value, they are using the technological tools and multiple channels at their disposal to learn about investing and validate the information or advice they are receiving. They describe themselves as “extremely” interested in improving their financial literacy and understanding of investing. To achieve this, they primarily frequent.online communities where investors interact with each other and financial professionals, watch online videos, and participate in online seminars or webinars, virtual meetings with advisors. investor-led online education, and social media, such as LinkedIn and financial firm or advisor blogs.
Financial advisors or firms might want to beef up their website and online services to attract these investors, who are more likely than their older cohorts to put a premium on them, according to a third quarter wealth level study of Mass Affluent investors (with a net worth between $100,000 and $1 million, not including primary residence) conducted by Millionaire Corner. Nearly three-fourths of those under 44 consider a website and online services offered important criteria in selecting an advisor.