Contrary to popular belief, it’s millennials who most want to ‘work closely’ with advisors - Nicola Wealth

Contrary to popular belief, it’s millennials who most want to ‘work closely’ with advisors


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Millennials may be driving the expansion of robo-advisors and other do-it-yourself trading platforms, but the generation is also embracing relationships with financial advisors, a recent survey shows.

According to a recent AIG Life & Retirement study in the U.S., almost four in five of millennials (79 per cent) “have a greater desire to work closely with their financial professional, if they have one,” versus 59 per cent of Gen Xers and 18 per cent of baby boomers.

It’s not entirely surprising given that millennials – now in their mid-20s to early 40s – are at the stage in life at which they’ve accumulated some wealth and need help to grow and manage it.

The survey’s results are a reminder for advisors that they need to pay attention to the generation that’s not only growing their wealth but poised to inherit it from their baby boomer parents.

Ethan Astaneh, wealth advisor at Nicola Wealth Management Ltd. in Vancouver, says many millennials come to his firm in two ways – either they’ve received a large company bonus, such as stock-based compensation, or they’ve received a financial gift or an inheritance from a family member.

In both scenarios, millennial clients are looking for advice on how to manage and grow the assets.

“What really attracts them is the planning because investments have become commoditized, especially to this group,” he says.

Many millennials also have different planning needs. Instead of saving for a traditional retirement at age 60 or 65, many expect to work well into their 70s and 80s and are looking to build wealth in a way that enables them to enjoy their working years as well as their retirement. The approach requires more complex and sophisticated wealth planning strategies.

More on how advisors can attract millennials clients

Still, Mr. Astaneh says many millennials continue to self-manage a portion of their wealth through easy-to-use online trading platforms, which have been designed largely to cater to their generation.

“The probability that I manage 100 per cent of a millennial client’s assets is lower than the probability that I manage 100 per cent of Gen Xers’ or baby boomers’ assets,” he says.

Ian Calvert, principal and vice-president, wealth planning, at Oakville, Ont.-based HighView Financial Group, says his company’s millennial clients often come through referrals from older family members already with the firm. Some millennial clients have had a bad experience with do-it-yourself investing and are seeking advice from a qualified professional.

He says members of this generation, in general, are also more active with their investments than older investors because they don’t have pension plans or rising home values to fall back on.

“They’re hungrier, more active and more inquisitive,” Mr. Calvert says.

Millennials are also more technologically savvy, which means advisors should be offering online tools they have come to expect to monitor their wealth.

“Millennials aren’t waiting at the mailbox for their monthly statement,” he says. “They want their wealth management experience to be digital and automated to really make things as smooth as possible.”

– Brenda Bouw, special to The Globe and Mail

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– Compiled by Globe Advisor staff