This content is from: Practice Management

Digital is King When Marketing to Millennials

Here’s how advisors can make the right moves to attract younger clients.

Retirement? Pfft.

Most people in their twenties and early thirties aren’t thinking seriously about retirement savings. They probably should. 

An AON study reported last year that most Millennials – those born between 1981 and 1996 - are falling behind in their retirement savings and aren’t putting aside 10% to 15% of their income. Student debt is a major culprit. 

For college students who graduated last year, nearly 70% have student loans, with an average debt of $29,800. And, adjusted for inflation, people aged 25 to 34 earned less in 2017 than the same age group did in 2000.

This all makes it challenging for advisors to attract Millennials as clients. However, some ingenuity and a focused effort to engage on their terms could make for a win-win situation.

Take 33-year-old Dylan O’Shea, a New York City-based Merrill Lynch wealth management advisor and Certified Financial Planner. O’Shea has developed a strategy to attract younger clients that starts with a professional yet unstuffy digital presence. 

That helps O’Shea reach a group that effectively lives online. (Josh Brown and Barry Ritholtz are two decidedly unstuffy advisors who have cracked the code for connecting with younger clients and the mass affluent.)

O’Shea’s tech-forward approach helps differentiate himself from less tech-savvy advisors. He recently ran a Webex presentation with a client, who was selling her firm. On the Webex, O’Shea’s client shared her computer screen. He reviewed her restricted stock units (RSU), and vested shares, and advised about possible options. 

O’Shea seeks, among others, potential clients who are at a financial crossroad or involved in a liquidity event. That could include an inheritance, the sale of one’s business, or a stock option windfall.

Encouraging current clients to recommend colleagues has worked successfully for O’Shea, who uses a no-pressure tactic. “Are there any people in your firm that I can connect with over coffee that I can also be of assistance to?” O’Shea asks.

O’Shea tries to develop “a frictionless digital experience,” he says. That includes being able to sign e-documents online and making everything as digitally accessible as possible. 

O’Shea emphasizes the importance of investing early. “One thing they have is time. With the longer time horizon, the more they can anticipate investing, the better off they’ll be.”

Participating in a company’s 401(k) or retirement program yields many benefits, particularly compounding and how that can radically increase wealth over time. 

O’Shea recognizes that many clients in their twenties or early thirties have pressing financial obligations that impede long-term saving. In the near term, home ownership, starting a family, and college debt often take precedence.

Once an advisor attracts a younger client, debt, all too often, becomes part of the conversation. 

Philip D’Unger, a 33-year-old financial advisor with Captrust Financial Advisors in Raleigh, N.C., says that controlling student debt is often the first step Millennials take when establishing a long-term plan.

D’Unger advises these clients to get a strong grip on their “cash flow and budgeting.” He recommends analyzing one’s budget, where money is spent, and analyzing what is essential and what is discretionary, then allocating funds to pare down debt.  

D’Unger recommends that younger clients track their student loans, balances and which loans carry the highest interest rates.  That “provides an overview of what the budget looks like and how you can organize it,” says D’Unger. “The goal is to come up with a strategy to track and manage each payment.”

O’Shea often urges Millennials to invest in an automatic savings plan. That entails “paying yourself first. It’s automatic and then that money can’t be spent.”

Thankfully, most will earn more over time. “As your income rises, which hopefully it will, that’s the time to reflect on what can be shifted into increasing saving,” D’Unger says.

Too often, the knee-jerk reaction is to spend on discretionary items, but that’s where an advisor can help establish a balance between long-term saving and current spending.


Related Content