Millionaire millennials are real, so start servicing them now

Millennials can’t seem to catch a break. As if constant wisecracks about spending $12 on avocado toast weren’t enough, there’s the pervasive perception that they are debt-laden disruptors who eschew legacy businesses and traditions, while demanding special treatment. 

That perception is wrong. 

The generation born between 1981 and 1996 is fast approaching 40 and, contrary to popular belief, they have worked hard and achieved real financial success. Recent estimates show that more than 600,000 millennials are already millionaires. In fact, at a count of 73 million people, millennials have eclipsed baby boomers as the largest generational group in the U.S., and as they inherit their parents’ money, we will see a massive wealth transfer of an estimated $68 trillion over the next 10 years.

[More: Still overlooking millennials? Not OK, Boomer]

So who will guide this unwanted cohort’s deceptively bright financial future? That’s the problem.


In his Feb. 24 cover story, Ryan W. Neal documented why millennial investors feel snubbed by the advisory industry. Only one in five advisers are serving any of the millennial generation’s high earners, not rich yet (HENRYs). Furthermore, a Cerulli Associates’ survey of people earning at least $100,000 shows millennials are working with advisers at a lower rate than previous generations in the same earnings bracket.

And for myriad reasons. Shrinking margins and fee compression are forcing some advisers to give up small accounts, despite the long-term upside, and the near $1.5 trillion worth of student debt carried by millennials is diminishing their investible assets, thus making them less appealing to advisers. Further, there’s the industry’s demographic problem. With just 11% of advisers aged 40 or under, and only 10% of them intending to remain in the industry for the long term, there is a paucity of advisers available to guide their peers. 

But it isn’t too late for advisers to develop real-life strategies to bring millennials into their practice, instead of shoving them toward robo-advisers and apps.

In a contributed piece on, Lindsay Faussone, vice president of strategic business development at ETrade Advisor Services, suggested three ways to transform debt-laden millennials into great clients. 

First, get their full financial picture. Don’t ignore them just because they carry debt right now or only seem interested in digital platforms. You can get HENRY clients started with simple portfolios that require little maintenance. 

Second, consider an alternative fee structure. Tailoring rates for up-and-coming clients, possibly with a subscription model, will pay off down the road. 

Third, provide education and outreach. Build a relationship with clients’ children as early as possible to lay the groundwork for future business. Educate them on building strategies that will bring the highest ROI. Most heirs do not remain with a parent’s financial adviser after inheriting $2 million or more. So, efforts to connect now could pay dividends later.

Finally, the financial advice industry is already in contraction, so firms must be more proactive about attracting and retaining younger advisers.


In a contributed piece this week on Page 21, John Taft, vice chairman of Robert W. Baird & Co., warns that the industry could lose as many as half its advisers over the next 15 years. He urges wealth managers to get serious not only about recruiting younger financial advisers, but also integrating next-gen talent into existing client relationships that can lead to connections with millennials.

To that end, Baird launched its Financial Advisor Foundations Program in 2012 to identify next-gen talent with an interest in financial services and a desire to help people. And Raymond James recently launched WealthMap, a two-year program allowing those interested in an advice career to earn Series 7 and Series 66 licenses while learning financial planning skills.

These are commendable efforts, but they are the exception. More effort is necessary to help the adviser industry get younger, and attract younger clients. To embrace millennials now is to embrace the future.

Written by Investors Wallets

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