5 Things Millennials Want (and Need) in a Financial Advisor

The following column from Jennifer Pagliara, CapWealth Senior Advisor, appeared in The Tennessean on April 27, 2017. Read it at The Tennessean here.

Colin Anderson, Getty Images/Blend Images RM

Some of you may remember an advertising slogan from the late 1980s: “Not Your Father’s Oldsmobile.” Some of you won’t remember it, which is understandable. It’s an old commercial for a car brand that’s been defunct for 13 years, after all. That aside, the line became a pop culture catchphrase. I’ll demonstrate: “Not Your Father’s Financial Adviser.” That aptly describes the millennials’ preference when it comes to finding professional financial assistance.

Millennials aren’t looking for their parents’ adviser — if they’re looking for one at all.

For starters, many millennials simply don’t have extra assets to invest right now.

They’re significantly indebted with student loans, they’ve faced a tough job market for years, and wages have been stagnant much or even the entirety of their lives.

Although a basic challenge, a dearth of capital isn’t the only hurdle. Besides the state of the millennial wallet, there’s the state of the millennial mind.

Having lived through the dot-com bubble of the late ’90s and early ’00s, the Financial Crisis of 2008 and the subsequent Great Recession, they’re skeptical of Wall Street.

There’s more. The Internet, smartphones and social media is the air millennials have breathed since birth. Startup founders such as Marc Zuckerberg and Elon Musk are more likely to be a millennial’s hero than traditional industrialists, and consequently millennials are very entrepreneurial. They’d rather invest in talent and creativity — often their own — than in stocks and bonds.

Add to that the millennials’ commitment to causes, be it environmental sustainability, tolerance and diversity, or fair wages, and convincing them to invest in profit-first corporations is an even harder sell.

If they are interested in investing, many would rather do what comes naturally: Get online, do some research and purchase cheap, passive products such as ETFs, skipping the inconveniences of finding and paying an adviser.

What millennials want

Fortunately for my profession, but also fortunately for their own financial futures, there are millennials who recognize the value in an experienced adviser. Still, from my experience with millennial clients, they don’t want just any adviser. Here’s what they’re looking for:

  1. Service. Millennials don’t want to be another warm body in a chair. They want you to care. Besides investment guidance, they want to be counseled on their debt, budgeting, financing the experiences they value and their careers. Now, most advisers don’t have all that expertise in-house. Forward-thinking, service-oriented advisers, however, can recommend people that they trust and know will do excellent work for their client.
  2. Reputation and trustworthiness. Trust me when I say that millennials are going to do their research on financial advisers. Because a few sleaze balls have tarnished the financial profession, millennials want assurance their adviser isn’t going to do the same.
  3. Accessibility. The days of meeting face to face for every meeting are fading away. The adviser needs to have the flexibility to meet at nontraditional times, at a coffee shop, and over the phone and internet-enabled videoconferencing platforms.
  4. Fair fees. They want crystal-clear transparency on how much they’ll pay and why. They don’t want to be nickel-and-dimed for every service provided.
  5. Feeling valued. Just because they don’t walk in the door with half a million dollars doesn’t mean that they aren’t future high-income earners. They know that and you’d better too. Millennials want to feel valued now and appreciated for what they will bring to the table in the future.

Most of these traits would well serve any adviser, regardless of their clientele. Don’t go the way of the Oldsmobile. Make sure you’re worth millennials’ time, trust and money.

Jennifer Pagliara is a financial adviser with CapWealth advisers. Her column appears every other week in The Tennessean.