Financial Sector Usually Overlooks the Financial Needs and Preferences of Millennials.
Rory O'Hara, a certified financial expert, runs Ausperity Private Wealth. It's high time to debunk the outdated narrative about millennials being lazy and irresponsible. Instead, this innovative generation is reframing businesses and redefining wealth creation.
People tend to view millennials negatively, thinking of them as being drowned in debt, squandering money, and living in their parents' basements. Sadly, this stereotype persists among many financial advisors nationwide.
Ignoring this rising economic powerhouse is a huge mistake. They're the driving force behind today's economic success, and they shouldn't be dismissed for baseless assumptions and exaggerated misconceptions.
The Millennial Entrepreneur Explosion
So why do some people hold these negative views of millennials? For starters, this generation endured significant challenges. They came of age during a financial crisis that diminished their lifetime earnings due to older workers delaying retirement, which led to fewer job opportunities.
The weight of student loan burdens and rising living costs also pose challenges that are only intensified by late career starts. However, countless millennials have turned adversity into triumph, becoming one of the most adaptive and entrepreneurial generations ever.
Case in point: a growing number of millennials have stepped up to launch businesses in the wake of the pandemic, echoing findings suggesting a strong focus on entrepreneurialism. In corporate America, millennials are swiftly climbing the corporate ranks.
They often negotiate compensation packages that include stock options, restricted stock units, and other complex payment structures.
Millennials and Money: Misunderstood and Ignored
Surprisingly, despite their wealth, financial advisors still concentrate on baby boomers, assuming millennials lack investable assets. In reality, millennials boast nearly $16 trillion in wealth and are poised to inherit another $72 trillion by 2045, part of the Great Wealth Transfer.
Yet, only about 25% of millennials work with financial professionals, representing a substantial missed opportunity for the financial planning industry. Some argue it's downright shameful.
Crucially, surveys indicate that 65% of millennial and Gen Z investors consider a financial advisor essential for financial success, compared to 56% of baby boomers who feel the same. This disconnect can only be explained by the financial industry's neglect of millennials.
Deep-Seated Millennial Financial Concerns
Unlike previous generations, millennials doubt the reliability of Social Security for retirement, as I've experienced while working with them. They're intensely focused on building wealth independently. Although they have critical questions, advisors often overlook them.
Questions like:- Should I prioritize maxing out my 401(k), a Roth IRA, or investing in emerging alternative assets like private equity?- How should I structure my stock options and restricted stock units?- Is it smarter to pay my mortgage aggressively or invest that capital elsewhere?- What's the best way to minimize taxes on my growing income?
Millennials require a trusted advisor who understands their predicaments. They don't need generic advice. Instead, they desire an advisor who comprehends their ambitions, challenges, and priorities.
What Millennials Are Seeking
To win over millennials, more than just fancy apps or hip social media presences are needed. The millennials I work with desire strategic partners, wealth advisors who grasp their aspirations, financial intricacies, and thirst for self-reliance.
Indeed, based on my experience, they value a thoughtful confidant most. They don't need general advice. Instead, they want to collaborate with someone who understands their ambitions, challenges, and priorities.
The best advisors will spend as much time building these connections as they do on critical offerings like customized portfolio strategies and delivering cutting-edge tech tools.
The Millennial Era is Now
It's time for financial advisors to reassess their strategies. Millennials aren't just the future; they're the present. Advisors who tailor their services to suit millennial needs will discover a fiercely loyal and lucrative clientele. On the contrary, those who ignore this generation may miss out on one of the most significant wealth-building opportunities in recent times.
The message to millennials is clear: Don't settle. Seek an advisor who listens, understands your ambitions, and offers tailored solutions that align with your vision for the future, whether your goals involve saving for retirement, buying a house, or addressing complex compensation packages. Having the right advisor can help transform your vision into a reality.
Disclaimer: The information provided here is not investment, tax, or financial advice. You should consult a licensed professional for advice specific to your situation.
- Rory O'Hara, a financial expert, acknowledges the misunderstood and overlooked financial potential of millennials, a generation that has been often entitled to negative labels such as irresponsible and entitled, but in reality, are redefining wealth creation through entrepreneurial strategies and innovation.
- Although millennials have been stereotyped as being heavily in debt and unfocused on financial matters, this generation boasts nearly $16 trillion in wealth and stands to inherit another $72 trillion by 2045. Yet, only a quarter of millennials work with financial professionals, presenting a significant missed opportunity for the financial planning industry.
- Millennials, like Rory O'Hara's clients, seek advisors who not only understand their financial complexities and challenges but also their ambitions and self-reliant nature. Instead of generic advice, they desire strategic partners who can offer customized portfolio strategies, collaborative solutions, and a deep understanding of their unique priorities.
